CARES Act: Paycheck Protection Program
John W. Lewis & Davidson Lentz
The Coronavirus Aid, Relief, and Economic Security Act includes $349 billion towards forgivable small business loans under the “Paycheck Protection Program.” Any business or nonprofit with 500 or less employees, or a larger amount established by the SBA’s size standards is eligible to receive a forgivable loan. Additionally, any hotel, restaurant, or food service business with less than 500 employees per physical location of the business, is eligible to receive a forgivable loan.
These loans are issued by 7(a) lenders at private financial institutions, with a 100% guarantee by the federal government through December 31, 2020. The loan amount is determined by the business’ average payroll over two and a half months, based on the past year’s average monthly payroll costs, up to a maximum of $10 million. There is no requirement that you must be unable to obtain loans elsewhere, and no collateral or personal guarantee is required.