We focused on the benefits and provisions offering relief to individuals in part one of our CARES Act series.
Part 2 will focus specifically on the provisions given to small businesses to ease revenue reduction and employment troubles during the current crisis.
As a main driver in not only job creation and stability but also, retirement and health care benefits to millions of people, small businesses are a crucial aspect of the American economy. The stimulus bill throws them a lifeline to stay afloat during this economic turmoil.
There are two major provisions small business owners should be aware of:
Paycheck Protection Program and Forgivable Loans
According to the Senate Finance Committee, this provision provides small business owners with a forgivable loan program offered through the Small Business Administration (SBA). Loans can be used to pay for a broad list of costs like payroll, group health care premiums, salaries, rent mortgage interest, utilities, etc. The loan must be applied for by June 30th to existing approved SBA lenders or those who qualify to give such loans and has a maximum maturity of 10 years. This is guaranteed by the SBA and loans can be forgiven up to 100% during the 8-week period following the issuance of the loan.
Employee Retention Credit
This credit was added to help businesses keep their employees employed and reduce the number of people applying for unemployment. It applies to companies that have been partially or fully suspended during a quarter stemming from governmental authority (non-essential business) or if revenue (not profit) in 2020 was less than 50% of the revenue generated in the same quarter of 2019. Companies that qualify for this will qualify for it until the end of 2020 in most cases.
The credit includes:
Unsure of what applies to your business? Speak to your advisor about the opportunities that may benefit you.
Ths form uses grid for its layout. Adjust and reorganize the divs inside the Form Grid to fit 1 or 2 grid columns as needed.