[Updated March 30, 2020]
Since President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act on March 27th, we’ve received many calls from our clients across the country asking how this stimulus package applies to their small businesses.
It’s no wonder. In this unprecedented time, many small business owners find themselves stretched thin and wondering how they will keep their business moving forward amidst so much uncertainty.
We’re here to help. Read on to learn more about the CARES Act, who it’s for, and 3 key ways it can help your business power through the pandemic.
Who is eligible for relief under the CARES Act?
In general, businesses with fewer than 500 employees who have been in operation since February 15, 2020, as well as sole proprietors, independent contractors, and certain self-employed individuals such as freelancers and gig workers are eligible for relief.
This can include:
- HVAC Professionals
- Auto Repair Shops
- General Contractors
- Independent Contractors
- Gig Workers
- and a host of other businesses across many industries impacted by the outbreak.
What kind of relief is available to small businesses?
For better or for worse, almost all businesses find themselves impacted by the global COVID19 pandemic. Here are 3 of the top reasons you might want to consider applying for relief under the CARES Act.
You’re struggling to make payroll or retain your employees.
The Payroll Protection Program (PPP) is available to help cover eligible expenses incurred from February 15, 2020 – June 30, 2020. Thee expenses can include salaries, wages, commissions, or similar compensation. It can also help a business pay for benefits such as vacation, parental, family, medical, or sick leave, as well as payments required for group health care benefits and insurance premiums. Retirement benefits and payment of state and local taxes assessed on employee compensation are also applicable.
Certain expenses are not applicable, including business owner or employee compensation over $100,000, compensation for employees whose principal residence is abroad, or sick and family leave for which a credit is already provided under the Families First Coronavirus Response Act.
You’re having a hard time covering the cost of operations or meeting business obligations because of Coronavirus
Quick infusions of smaller amounts of cash can also be obtained up to $10,000 through an Emergency Economic Injury Grant. These grants do not need to be repaid and can help businesses make ends meet by helping to keep employees on payroll, meet increased production costs, and pay business obligations like debts, rent, and mortgage payments.
To receive an Emergency Economic Injury Grant, applicants must first apply for an Economic Injury Disaster Loan (EIDL).
You’re worried about keeping up with payments on your existing SBA loan
Countless small businesses have relied on SBA loans to get their start or expand operations. With many of those same businesses experiencing loss of revenue due to COVID19, concerns about being able to keep payments on these loans current are only natural.
The CARES Act provides payment relief for small businesses with a non-disaster SBA loan including 7(a), 504, and microloans via the Small Business Debt Relief Program. New borrowers will also be eligible to apply for this relief towards loans taken out within six months of the bill being signed into law.
Additional Resources for Coronavirus Relief
While the Coronavirus Aid, Relief and Economic Security (CARES) Act is bound to be welcome news for small business owners facing difficult times, there are more and more resources becoming available every day. Here are just a few.
Facebook has committed to giving out $100 Million in cash grants and ad credits to businesses impacted by COVID19. Facebook expects to begin accepting applications in the coming weeks. Full details have yet to be released, but you can still stay abreast of the details and sign up to receive updates.
Check Your Insurance Coverage
Some businesses have business interruption insurance to help cover costs in the event of a disruption in normal operations. Get in touch with your insurance provider to understand your coverage, and whether these benefits may be available to you.
Get Expert Help
The SBA’s Resource Partners like SCORE & SBDC, as well as District Offices, have specialists on hand who are able to help you design a plan to navigate fluctuations in demand. Reach out to your local chapter. Learn more about how SBA Resource Partners can help.
Doing business during a pandemic is a unique challenge, but one that can be navigated with a little help. We’re here for you. Subscribe to the blog and check back often for updated details on how the CARES Act and other resources can help you power through. As we learn more over the coming days and weeks, we will update our blog with additional resources to help your business not only survive but thrive in these uncertain times.