by Casey Olden — On Friday March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. Among other things, the Act authorizes two programs that may provide your business with supplemental working capital during this difficult time: Economic Injury Disaster Loans (EIDLs) and the Paycheck Protection Program.
EIDLs may be issued for up to $2,000,000, and repayment may be initially deferred. What is remarkable is that, if you decide to apply for an EIDL, the federal government will advance up to $10,000 within 3 days of applying. This money does not have to be repaid, even if you are ultimately denied a loan.
Eligibility criteria and repayment terms can be found on the Small Business Administration’s website at https://www.sba.gov/disaster-assistance/coronavirus-covid-19.
The Paycheck Protection Program was developed to help small businesses keep their employees on payroll. The hallmark of this program is the possibility of having the loan forgiven if used for certain payroll and group health insurance costs, rent and utilities, and mortgage interest within the first 8 weeks. Click here to learn more: https://www.sba.gov/funding-programs/loans/paycheck-protection-program.
There are several conditions that must be satisfied before receiving loan forgiveness, so be sure to review the eligibility rules carefully or consult with one of our business law attorneys. You can reach us directly at 203-744-1929.