As Part Of The Trump Administration's CARES Act, Small Businesses Can Apply For Up To $10 Million Dollars In Loans That Will Be Forgiven If The Business Keeps Paying Their Employees

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The Facts:

TODAY, SMALL BUSINESSES CAN START APPLYING FOR $350 BILLION IN FORGIVABLE LOANS PUT INTO PLACE BY THE CARES ACT SIGNED BY PRESIDENT TRUMP

Starting today , the country's 30 million small businesses can apply for loans up to $10 million to cover 8 weeks of overhead expenses and payroll.

The $350 billion program will provide loans to businesses with 500 or fewer employees and the loans will be 100% forgiven if the business retains its employees.

THE PAYCHECK PROTECTION PROGRAM PROVIDES LOANS TO HELP BUSINESSES COVER COSTS AND INCLUDES STRONG INCENTIVES FOR BUSINESSES TO KEEP PAYING WORKERS

As part of the CARES Act, the Paycheck Protection Program provides guaranteed loans designed to help small businesses pay for payroll, rent, and other expenses.

Businesses with less than 500 employees are eligible for loans for up to $10 million and each loan will cover up to two months of their average monthly payroll costs, plus an additional 25%.

Businesses in certain industries may have more than 500 employees if they meet the SBA's size standards for those industries.

The Paycheck Protection Program provides a direct incentive for small businesses to keep paying workers; under the program, the government will forgive 100% of the loans if all employees are kept on payroll for eight weeks.

Over 65 million people, more than 50% of American workers, are employed by a small business (less than 500 employees).

Businesses in the hospitality and food industry with more than one location could also be eligible if their location employs less than 500 workers.

Experts say the $350 billion Paycheck Protection Program may be " the most effective " provision in the CARES Act in getting struggling businesses to retain their employees instead of laying them off.

Keeping workers employed will also boost the economy ; Susan Houseman, Director of Research at the W.E. Upjohn Institute for Employment Research emphasized that having people there, "ready to work, ready to go, will speed a recovery."

SMALL BUSINESS OWNERS ACROSS THE COUNTRY ARE GRATEFUL FOR THE BADLY NEEDED ASSISTANCE

Don Cunningham, President and CEO of Lehigh Valley Economic Development Corp in Colorado: "I think it's a great effort and it was done quickly, and the channels of payments are in the right area."

Karen Hoskins, owner of Montanya Distillers in Colorado: "This really benefits companies that have been on the straight and narrow."

Jason Mulvene, President of Blue Ocean Traders in Kentucky: "This will be a great lifeline to retain employees and cover expenses in the short term."

Gat Caperton, CEO of Gat Creek Furniture in West Virginia: "It is gigantic, and it should prove very helpful to small businesses like us and our retailers."

Adam Waterrus, owner of Lost City Books in DC, said he is optimistic the loan program will keep his business stay afloat.

Pia Carusone, CEO and co- founder of Republic Restoratives Distillery in DC, said the loan forgiveness program would help pay bills and keep their business running.

Jim Uridales, owner of Mesitizo , a restaurant in Louisiana, said he was eager to apply for the SBA loan program, "there's no way we could survive without something."

Leslie Stierle, owner of Salon Aerie in Louisiana, is hopeful that "this package will help sustain us enough to get back to where we were."

Chris Hillen, owner of Seal Tex in Texas: "For many business owners, this is a chance to boost cash flow immediately, keep workers on staff and build a bigger financial cushion."

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TODAY, SMALL BUSINESSES CAN START APPLYING FOR $350 BILLION IN FORGIVABLE LOANS UNDER THE CARES ACT WHICH WAS SIGNED BY PRESIDENT TRUMP

Starting Today, The Country's 30 Million Small Businesses Can Apply For Loans Up To $10 Million To Cover 8 Weeks Of Overhead Expenses And Payroll

President Trump's Economic Relief Package Will Greatly Help The United States' 30 Million Small Businesses And Nonprofits By Making Billions Of Dollars In Forgivable Loans Available. "The $2 trillion stimulus package passed by Congress and signed into law by President Trump strives to keep small businesses and nonprofits afloat, and workers on the job, by making billions of dollars in forgivable loans available to the country's 30 million small businesses." ( The Boston Globe , 3/31/20)

Treasury Secretary Steve Mnuchin Announced That Small Businesses With Less Than 500 Employees Will Be Able To Begin Applying For Loans To Cover 8 Weeks Of Overhead Expenses And Payroll Starting Today. "Tuesday's announcement comes after Mnuchin said Monday that he hoped documents about the program would become available that day. Mnuchin reiterated on Tuesday that he expects businesses to be able to start to apply for and receive loans on Friday. 'This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,' Mnuchin said in a statement. 'Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day.'" ( The Hill , 3/31/20)

Small Businesses And Sole Proprietorships Will Be Able To Start Applying For Loans Today And Self-Employed People And Independent Contractors Will Be Able To Apply Starting Next Friday. "Treasury's fact sheet for borrowers states that small businesses and sole proprietorships will be able to start applying for loans on Friday through existing SBA lenders, and self-employed people and independent contractors will be able to start applying for loans through existing SBA lenders on April 10. Other lenders will be able to start to make loans through the program once they are approved." ( The Hill , 3/31/20)

The $350 Billion Program Will Provide Loans To Businesses With 500 Or Fewer Employees; The Loans Will Be 100% Forgiven If The Business Retains Its Employees. "The coronavirus relief package created a nearly $350 billion program under which businesses with 500 or fewer employees can receive loans of up to $10 million. The loans will be forgiven if businesses use the funds to cover payroll costs and other operating expenses in the eight weeks following loan origination." ( The Hill , 3/31/20)

THE PROGRAM PROVIDES LOANS TO BUSINESSES TO COVER COSTS AND INCLUDES STRONG INCENTIVES TO KEEP PAYING WORKERS

As Part Of The CARES Act, The Paycheck Protection Program Provides Guaranteed Loans Designed To Help Small Businesses Pay For Payroll, Rent, And Other Expenses

The Paycheck Program Is Available For All Businesses With Less Than 500 Employees, Businesses In The Hospitality And Food Industry With More Than One Location Could Also Be Eligible Level If Their Location Employs Less Than 500 Workers. "This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19. Businesses in certain industries may have more than 500 employees if they meet the SBA's size standards for those industries. Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible." ( Small Business Administration , Accessed 3/30/20)

Businesses Are Eligible For Loans For Up To $10 Million And Each Loan Will Cover Up To Two Months Of Their Average Monthly Payroll Costs From The Last Year Plus An Additional 25% Of That Amount. "How large can my loan be? Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee." ( Treasury Department , Accessed 4/2/20)

Payroll Costs Include Wages, Including Tips, Up To $100,000 Per Employee, Taxes, And Benefits Including Parental, Family, Medical, Or Sick Leave, Health Care And Retirement . "Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee); Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit; State and local taxes assessed on compensation; and For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee." ( Treasury Department , Accessed 4/2/20)

The Economic Stimulus Package Designated $350 Billion To Fund The Program To Keep Money Flowing To Workers While At The Same Time Positioning Businesses To Snap Back Quickly Once The Crisis Subsides. "The program is already funded with $350 billion and it's certainly possible more will be added as the government scrambles to avert a total economic meltdown. It's a very large investment by the government to keep money flowing to workers, while at the same time positioning businesses like yours to snap back quickly once the crisis subsides. The loans, made by private lenders, are 100 percent federally guaranteed." ( The Boston Globe , 3/31/20)

Mnuchin Has Said The Program Will Provide Loans To Every Business Who Wants One And Vowed To Request More Money If The Existing $350 Billion Is Insufficient. "Mnuchin also promised that the administration would request more money if it sends out the $350 billion and additional small businesses are clamoring for help. 'If we run out of money, and this is a huge success, we will absolutely go back to Congress and ask for more money,' he said." ( The Washington Examiner , 3/30/20)

In An Effort To Keep Americans Who Work For Small Businesses Employed, All Loans Will Be 100% Forgiven If Businesses Keep Their Workers On Payroll

The Paycheck Protection Program Provides A Direct Incentive For Small Businesses To Keep Paying Workers As The Government Will Forgive 100% Of The Loans If All Employees Are Kept On Payroll For Eight Weeks. "The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program will be available through June 30, 2020." ( Small Business Administration , Accessed 3/30/20)

Over 65 Million People, More Than 50% Of American Workers, Are Employed By A Small Business (Less Than 500 Employees). ( Bureau Of Labor Statistics , Accessed 3/21/20)

Businesses Must Keep Payroll Intact To Qualify For Loan Forgiveness And Borrowers Who Laid Off Workers Can Reinstate Their Jobs And Salaries By June 30 To Recover Credit Toward Loan Forgiveness. "'You have to keep your payroll intact,' said Jay Shambaugh, an economist at the Brookings Institution, a think tank. 'The amount of loan forgiveness gets reduced if you reduce your payroll substantially.' Borrowers who laid off workers can reinstate their jobs and salaries by June 30 to recover credit toward loan forgiveness, according to David Newman, a partner at the law firm Morrison & Foerster." ( CNBC , 4/1/20)

Experts Say That The $350 Billion Paycheck Protection Program Is The Part Of The Coronavirus Package That May Be "The Most Effective" In Getting Struggling Businesses To Retain Their Employees Instead Of Laying Them Off. "The $2 trillion coronavirus relief law signed by President Trump last week has several incentives for struggling businesses to retain their employees instead of laying them off … The provision that may be most effective is a $350 billion loan program for sole proprietors, independent contractors, self-employed individuals, nonprofits and businesses with fewer than 500 employees, experts said." ( CNBC , 4/1/20)

Susan Houseman, Director Of Research At The W.E. Upjohn Institute For Employment Research Praised Provisions In The Bill Designed To Keep People Employed: "Having People There, Ready To Work, Ready To Go, Will Speed A Recovery." "'I see an emphasis in a lot of the provisions of the bill as trying to keep people employed during this period,' said Susan Houseman, director of research at the W.E. Upjohn Institute for Employment Research. 'Having people there, ready to work, ready to go, will speed a recovery' of the economy, she added." ( CNBC , 4/1/20)

In Addition To The Paycheck Protection Program, The CARES Act Provided Additional Relief For Small Businesses Including Disaster Loans, Payroll Tax Credits, And Payroll Tax Deferral

The Small Business Administration Is Also Providing Low-Interest Economic Injury Disaster Loans, Applicants Can Also Be Approved For A Grant Of Up To $10,000, Which Does Not Need To Be Repaid And Is Supposed To Be Processed In Only A Few Days . "The Small Business Administration is also providing low-interest economic injury disaster loans. One special feature of these loans is that applicants may also be approved for a grant of up to $10,000, which does not need to be repaid and is supposed to be processed in only a few days." ( The Boston Globe , 3/31/20)

Businesses That Do Not Participate In The Paycheck Protection Program Are Eligible For A Payroll Tax Credit Of Up To $5,000 Per Worker. "The credit, available through 2020 to ailing businesses, is equal to 50% of wages (including qualified health plan expenses) of up to $10,000 per worker. (So, the maximum credit per employee is $5,000 this year.) It's not available for businesses that also get a loan through the Paycheck Protection Program. The credit can be claimed against quarterly payroll taxes. The Treasury can make advance payments of the tax credit, and waive penalties for employers who don't pay applicable payroll taxes in anticipation of receiving the credit." ( CNBC , 4/1/20)

The CARES Act Also Allows Small Businesses To Defer Some Payroll Taxes This Year To Help Free Up Cash For Struggling Businesses. "The CARES Act also allows small businesses to defer some payroll taxes this year. Employers can defer their portion of the Social Security payroll tax - a 6.2% rate in 2020. The measure won't necessarily save firms money because they must pay the tax later. But it could help free up cash for struggling businesses, and firms only get the benefit to the extent they have workers on payroll, experts said." ( CNBC , 4/1/20)

SMALL BUSINESS OWNERS ACROSS THE COUNTRY ARE GRATEFUL FOR THE BADLY NEEDED ASSISTANCE

Small Business Owners Across The Country Have Praised The Loan Program And Are Thrilled That The Recovery Package Rewards Business Owners Who Do The Right Thing

Don Cunningham, President And CEO Of Lehigh Valley Economic Development Corp In Colorado: "I Think It's A Great Effort And It Was Done Quickly, And The Channels Of Payments Are In The Right Area." "Some praised the bill's focus on small businesses. 'I think it's a great effort and it was done quickly, and the channels of payments are in the right area,' said Don Cunningham, president and CEO of Lehigh Valley Economic Development Corp. Cunningham said the focus should be on small businesses first and noted the bill would include $350 billion administered through the SBA." ( Lehigh Valley Business , 3/31/20)

Karen Hoskins, Owner Of Montanya Distillers In Colorado, Applauded How The CARES Act Protects Business Owners To Do The Right Thing. "Hoskin, with Montanya Distillers, closely followed the CARES Act 'get formed, unraveled and rebuilt.' She met with other Gunnison Valley business leaders connected through Western Colorado University's ICELab, to discuss options and benefits on weekly Zoom calls. She applauds how the CARES Act seems to protect business owners who do the right thing." ( Colorado Sun , 4/1/20)

Hoskins Praised The Fairness Of The Bill Towards Small Businesses: "This Really Benefits Companies That Have Been On The Straight And Narrow, Which Is My Company." "'What I was really impressed with was if you've been dodging anything in the past - payroll taxes, paying under the table - that's really going to bite you back. This really benefits companies that have been on the straight and narrow, which is my company,' Hoskin said. 'If we had 100 employees in January or February and we only have 80 when we applied for the loan, we would only get 80% of the loan forgiven.'" ( Colorado Sun , 4/1/20)

Jason Mulvene, President Of Blue Ocean Traders In Kentucky: "This Will Be A Great Lifeline To Retain Employees And Cover Expenses In The Short Term." "With regard to the stimulus bill's policies and programs, Jason Mulvene, president of Blue Ocean Traders, commented, 'The biggest impact out of the gate for small to mid-size businesses is the PPP loan program. With its significant forgivable portion, this will be a great lifeline to retain employees and cover expenses in the short term.'" ( Home Accents , 4/1/20)

Gat Caperton, CEO Of Gat Creek Furniture In West Virginia: "It Is Gigantic, And It Should Prove Very Helpful To Small Businesses Like Us And Our Retailers." "Furniture Today's discussion with additional industry leaders echoed these positive sentiments. For example, Gat Caperton, CEO of Gat Creek Furniture, commented on the stimulus bill, saying, 'It is gigantic, and it should prove very helpful to small businesses like us and our retailers.' Click here to see the full Furniture Today article." ( Home Accents , 4/1/20)

Adam Waterrus, Owner Of Lost City Books In DC, Said He Is Optimistic The Loan Program Will Keep His Business Stay Afloat. " Adam Waterreus, who owns Lost City Books in D.C., has seen a steep 75% decline in sales since the pandemic hit. He's laid off four employees and is struggling to keep three others on payroll. 'It seems like (financial relief) might be happening, which I think is important, that they're giving certain provisions to small businesses,' he said of the $2 trillion federal coronavirus relief package. Waterreus said he is nervous about taking on more debt with new loans but is optimistic financial aid might keep him afloat for the short-term." ( ABC News , 3/26/20)

Pia Carusone, CEO And Co-Founder Of Republic Restoratives Distillery In DC, Said The Forgiveness Loan Program Would Help Pay Bills And Keep Their Business Running. "Congress this week is expected to approve a major infusion of cash -- more than $350 billion in emergency loans for small businesses that include a big perk: owners won't have to pay back the government, if they use the money to cover rent or worker wages. 'I would take that deal any day to allow us to do that, if those loans could therefore be forgiven,' said Pia Carusone, CEO and co-founder Republic Restoratives Distillery in Washington, D.C., which produces craft vodka, bourbon and brandy. 'Our bills don't just stop. We have a working capital loan that we've got so much debt on and a large rent bill every month from our landlord,' Carusone said. 'So, we're not in a good position to have nearly zero revenue coming in to our wholesale business.'" ( ABC News , 3/26/20)

Jim Uridales, Owner Of Mesitizo, A Restaurant In Louisiana, Said He Was Eager To Apply For the SBA Loan Programs, "There's No Way We Could Survive Without Something." " Mestizo owner Jim Uridales has already signaled his interest to his local banker, saying 'it's all about getting in the queue.' Though his application is ready to go, Uridales is skeptical a loan will be enough to help him weather what he's anticipating will be a slow May, given the cancellations of graduations and other celebratory events he's used to catering. After closing the dining area of his Mexican restaurant, Uridales had to lay off 20 workers and has subsequently seen a 60%-70% decline in sales. 'We're absolutely interested-there's no way we could survive without something,' says Uridales, who watched a 2 p.m. webinar with the Louisiana Restaurant Association to learn more about the program. 'We just did all that remodeling [in 2018], so there might be a way for us to repackage our whole loan program at a cheaper interest rate.'" ( Business Report , 3/27/20)

Leslie Stierle, Owner Of Salon Aerie In Louisiana Is Hopeful That "This Package Will Help Sustain Us Enough To Get Back To Where We Were." "However, some business owners-like Lesli Stierle, who runs Salon Aerie on Coursey Boulevard-don't use an authorized 7(a) lender as their primary bank, complicating the process. When reached by phone this afternoon, Stierle told Daily Report she had been on hold with the SBA for the past two hours. 'I'm hoping this package will help sustain us enough to get back to where we were and get our clients back in the door,' says Stierle, who shut down her hair salon eight days ago and has since been selling gift cards and products online. 'My staff is on unemployment, we have very little money coming in, and our clientele is out of work.'" ( Business Report , 3/27/20)

Chris Hillen, Owner Of Seal Tex In Texas: "For Many Business Owners, This Is A Chance To Boost Cash Flow Immediately, Keep Workers On Staff And Build A Bigger Financial Cushion." "For many business owners, this is a chance to boost cash flow immediately, keep workers on staff and build a bigger financial cushion. Such moves could make the difference in surviving today's crisis and coming out stronger on the other side. 'I'm all over it,' said Chris Hillen, who's never applied for a government business loan but sees no downside to this one. 'I'm planning to hold on to my employees anyway, so this could be great.' His Dallas company, Seal Tex, repairs commercial kitchens and has some big clients, including Texas Roadhouse, Olive Garden and Wendy's. Last week, he sent his 40 employees home, both for their safety and to help slow the spread of the virus in North Texas. He's paying them as if they were working 30 hours a week, he said, because it's the right thing to do and he can afford it. With a government loan, he could bump up their hours or keep carrying on as is, depending on the pace of the recovery. 'This will allow us to fight on for longer,' Hillen said." ( Dallas News , 4/1/20)

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