4.1.20 – CEPro
Enhanced guidelines issued by US Treasury Dept. show integrators and manufacturers can apply for CARES Act loans on April 3. Self-employed individuals can apply on April 10.
The U.S. Treasury Department has issued enhanced guidelines and set the dates for when small businesses can start applying for Small Business Administration (SBA) loans as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act Phase III Stimulus package.
Any small for-profit business with fewer than 500 employees is eligible for a CARES Act loan. The government made a point of clarifying that all CARES Act loan terms will be the same for every applicant. The federal government has set aside $349 billion for this Paycheck Protection Program.
The CAREs Act loan amounts will be forgiven as long as:
- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made.
- Employee and compensation levels are maintained.
Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. Loan payments will be deferred for 6 months.
Application Dates Set
Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive CARES Act loans to cover their payroll and other certain expenses through existing SBA lenders.
Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
Where to Apply for a CARES Act Loan?
Small businesses can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.
Manufacturers and integrators should consult with their local lender as to whether it is participating in the CARES Act loan program. Visit www.sba.gov for a list of SBA lenders.