By Scott Moser

Do you have a small business with less than 501 employees adversely affected by the Covid-19 virus?  Here is a program you won’t want to pass up.  Congress recently enacted the CARES Act which provides low interest SBA loans for 2.5 months of payroll costs to help small businesses stay in business during the virus standstill.  To encourage small businesses to use the loan proceeds to keep their employees on the payroll, the law allows for loan forgiveness to the extent the proceeds cover payroll, rent, utilities & interest over the two months following receipt of loan proceeds.  There are numerous limits and details to meet but those who are eligible should take the time to apply.

Here is a short version of the rules:  

https://www.uschamber.com/sites/default/files/
023595_comm_corona_virus_smallbiz_loan_final.pdf

The program Administrator has yet to draft all of the rules so you should expect possible revisions as the program develops.  Here is a link to the actual law for those that are really curious:

https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-H77B4D3AE3E144B039483546D7EC11D5D

Our Recommendations  -  the flood gate opens April 3, 2020 so it’s best to act quickly:

  • Contact your lender to inquire if they are an authorized SBA lender
  • Request the lender’s SBA application package
  • Pull together your 2019 yearend financial statements and payroll reports - you’ll need them to complete the application
  • Prepare a worksheet that summarizes your eligible 2019 payroll costs to compute the loan amount
  • Complete the application and assemble the supporting financial reports or payroll tax returns requested by your lender

Your lender should be able to guide you through the process and save you time compared to navigating the application from the SBA web site.  Let us know if we can help.  This program is a reminder of why we are fans of real-time accounting systems!  We hope you are healthy and enjoying time with your family;  it may be time to put them work in your business!