CARES Act

The $2 trillion dollar Coronavirus Aid, Relief and Economic Security Act (CARES Act), provides economic relief to businesses, states and municipalities and individuals affected by COVID-19. Of that, $350 billion is in emergency loans for small businesses to help them keep workers employed. In fact, if small businesses maintain or later restore their payrolls, they may not have to repay some — or possibly any — of the loan. Here’s a guide and checklist from the U.S. Chamber of Commerce to help your small business through the process. Here are some elements of the CARES Act legislation to be aware of. (The following was provided by the Greater Des Moines Partnership)

Small Business Paycheck Protection Program (New Program)
Who qualifies: Small businesses (500 or fewer employees, but up to 1,500 depending on the sector), 501(c)(3) non-profits (500 or fewer employees), sole proprietors, the self-employed and independent contractors.

How much is available? Initially loaned through the SBA 7(a) program, but with 100% government guarantee, for monthly payroll costs for 2 1/2 months, not to exceed $10 million. Payroll costs exclude compensation paid to individuals, including the self-employed, above $100,000 a year. The borrower shall have a portion of the loan forgiven in the amount equal to their payroll costs, interest payments on mortgages, rent payments and utility payments between Feb. 15 and June 30, 2020. Loan forgiveness will be reduced if the borrower reduces employment by a ratio similar to their reduction in employment or if borrower reduces salaries and wages by more than 25%.

SBA Loan Payment Support
The CARES Act provides $17 billion for the U.S. Small Business Administration (SBA) to cover six months of payments for businesses with current SBA loans.
Economic Injury Disaster Loan (EIDL) Changes
The following changes have been made to this existing program, administered by the SBA.

Loans can be made based solely on credit scores.
Loans are now made available to all nonprofits, including 501(c)(6) organizations.
Loans below $200,000 can be approved without a personal guarantee.
Borrowers can receive $10,000 cash advances that are forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.

Where to apply: disasterloan.sba.gov/ela.

Unemployment Programs
The CARES Act extends unemployment insurance by 13 weeks and includes a four-month enhancement of benefits, all covered by the federal government. Individuals must provide certification that he or she are not eligible for regular unemployment insurance, but is unemployed or underemployed due to coronavirus. Additionally, upon agreement between a state, an additional $600 per worker per week of unemployment compensation is available through July 31, 2020. The CARES Act increased the availability of unemployment insurance benefits to those that are self-employed, contract workers, those ineligible for state unemployment benefits or have exhausted benefits.

Where to apply: iowaworkforcedevelopment.gov/COVID-19