What Does The CARES Act Mean For My Business?
That is the question on every small business owner’s mind. The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed on Friday, March 27, 2020 to provide timely aid to business owners during this health crisis that has affected us all. We will continue to learn more about the full ramifications of the act in the coming weeks but we wanted to get some important information out to you as quickly as possible.
First, we want to encourage every business owner to take a close look at the Paycheck Protection Program. Under this unique program, you can get an SBA loan to cover up to 8 weeks of payroll, health insurance, loan interest, rent and utilities without the need for the usual lengthy loan application and approval process. These loans require no collateral or personal guarantees. Additionally, if you use the funds to cover only those qualified expenses, it may be forgiven and converted to a grant with no repayment requirement.
The Paycheck Protection Program is also available to self-employed individuals looking to recover or replace their lost income. The net-earnings from self-employment are considered “payroll” for purposes of calculating the available relief under the program.
For a quicker infusion of cash, you can also consider the Economic Injury Disaster Loan (EIDL) or the Emergency Economic Injury Grant (EEIG).
Detailed information about the SBA loan plans under the CARES Act is available at https://tinyurl.com/v3yowmd
Maryland has also provided financial assistance to businesses during this time. The Maryland loan and grant options appear to be more restrictive than the newly enacted Federal options and are limited to $50k and $10k respectively, however we encourage you to review the available funding at the State level as well. https://govstatus.egov.com/md-coronavirus-business
Unemployment benefits have also been significantly expanded under the CARES Act. If you have laid off employees or had to reduce their hours, please encourage them to file for unemployment benefits.
The benefits have been increased by an additional $600/week and there is no waiting period. Additionally, self-employed individuals and contractors are also now eligible to file for unemployment. Information on how to file for Maryland Unemployment can be found at https://www.dllr.state.md.us/employment/uibenefits.shtml
Finally, the National Association of Tax Preparers has released a well-organized, plain English summary of major provisions of the CARES Act that can be found at https://tinyurl.com/seoozhy.
We will continue provide updated or additional information as it becomes available and wish each of you the best during these challenging times.