$2 Trillion Stimulus Package Includes $350 Billion to Help Small Businesses During the Covid-19 Pandemic

On March 27. 2020, The President signed The Coronavirus Aid Relief and Economic Security ACT (CARES) into law, a massive $2 Trillion US Government Stimulus Package.

The main purpose of the package is to provide cash to Americans, Businesses, States, Cities, and Health Care Facilities. The measure includes the Paycheck Protection Program Initiative to help small businesses keep workers employed amid the pandemic and economic downturn with 100% federally guaranteed, potentially forgivable, loans.

  1. What business is eligible to receive one of these loans?

    • A small business or A 501(c)(3) with fewer than 500 employees.
    • An individual who is self-employed who regularly carries on any trade or business.
    • An individual who operates as a sole proprietor or independent contractor.
    • A Business in the accommodation and food services sector (NAICS 72) with fewer than 500 employees as applied on a per physical location basis.
    • Certain Franchises or others who receive financial assistance from an approved Small Business Investment Company since the the normal affiliation rules do not apply.
    • A small business, Tribal business concern or 501(c)(19) Veterans Organization that meets the SBA size standard.
  2. What Are the Qualifications for a business to Get a Loan?

    • For businesses with employees – Must have been in operation before February 15, 2020 and had employees for whom paid salaries and payroll taxes or paid independent contractors.
    • If you are a sole proprietor/independent contractor/self-employed – Certain information returns (TBD) to show income and expenses.
    • Provide a good faith certification that:
      • The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
      • The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
      • Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here
      • From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan)
  3. How much will you be able to borrow?

    • For businesses with employees – Loans can be up to 2.5x the borrower’s average monthly payroll costs, not to exceed $10 Million.
    • For Sole Proprietors, Independent Contractors, and Self-Employed
      Individuals earning under $100,000 a year – Loans can be up to 2.5x the , as pro-rated for the covered period.
    • Look at The U.S. Chamber’s Small Business Loan Guide & Checklist for more information on what costs are included and what costs are excluded.
  4. What Needs to be done to have the loan forgiven?

    • A borrower is eligible for loan forgiveness equal to the amount spent on payroll costs, business mortgage interest usually paid, rent, and utilities.
    • The amount forgiven will go down if you reduce employees/wages by 25%
    • Look at The U.S. Chamber’s Small Business Loan Guide & Checklist for more information on the loan forgiveness.
  5. Where can a business go to get one of these loans?

Related Sources and Links:

. IRS Coronavirus Page
. Small Business Administration Covid-19 Guidance and Loan Resources
. The U.S. Chamber’s Small Business Loan Guide & Checklist
. NJ Emergency Assistance Eligibility Wizard




This is general information and should not be relied upon to make business or tax decisions. Instead, please use the above information as a resource to help discuss your business and financial picture with your professional advisers.


(c) 2020 Simoncpa, PC

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