On Friday, March 27, Congress passed & Trump signed the historic $2 Trillion economic stimulus package called the “Coronavirus Aid, Relief, and Economic Security (CARES)” Act, which has numerous provisions for helping businesses impacted by the COVID-19 pandemic. We would like to share some preliminary information and a summary of the Act to help keep your informed to make the best decisions possible for your business or to share with your business customers. Please see the link below for a comprehensive summary of the components of the Act specifically to help businesses. This is the extent of what we know at this time. As the bill starts to be interpreted into policy & procedures over the upcoming days, we will continue to provide updates.
Key Components of the Act pertaining to funding & financing of businesses include:
- Debt Relief for SBA borrowers. Loan payments for all SBA 504 and 7a loans will be covered for a period of 6 months. This is not a deferment, but rather debt relief that will not be required to be paid back down the road. The timing is supposed to be immediate, which we believe would mean starting with the May 1 payment cycles. We will send notices to all of our SBA 504 and 7a borrowers about their specific loans as additional information is available.
- Paycheck Protection Program (PPP). This will be an SBA 7a loan available through local lenders (banks, credit unions, etc.) for up to $10 million to cover working capital needs during this crisis. A portion of the loan that covers 8 weeks of payroll and other costs will be forgivable. Payments will be deferred for up to 1 year and there are no fees for this loan.
- Emergency Economic Injury Grants as part of the SBA Economic Injury Disaster Loan Program (EIDL). Will provide a $10,000 advance to small businesses who apply for the EIDL within 3 days. Additional details about the EIDL program are available here.
The Act also includes provisions for government contractors, business counseling services, tax provisions, delay of payment for employee payroll taxes and more.
Again, this is all the information that we have at this time. We will continue to share additional information as the bill gets interpreted into policy & procedure over the next several days.
MORE INFORMATION ON THE CARES ACT AND STATE-SPECIFIC RESOURCESClick Here for a Summary of the 2020 CARES Act North Dakota Minnesota Montana