CARES Act Loans – A bit more detail

So the Coronavirus Aid, Relief and Economic Security Act (CARES act) has passed the House and Senate and President Trump signed it not long later. There are a lot of people that have done analyses of the provisions of the bill and this is not intended to replace or supplant any of those.

The one provision in this bill that may be helpful to many of our members is the addition of two loan programs intended to help small businesses. The bill made changes to the Economic Injury Disaster Loan program. I believe it increases the borrowing ability and made some other guarantee changes.

Another provision is the addition of a Paycheck Protection Program. This is a guarantee program up to 2Million dollars that will allow borrowers to pay rent, payroll and other expenses for two months and have that portion of the loan forgiven. The way I understand it (rumors mostly) the borrower could get the loan based on estimate of the expenses. At the end of the 2 months, pay back any excess borrowed and the amount used for those expenses would be forgiven. There are a number of qualifications and restrictions.

One of the better sources I’ve seen so far is a Baker Donelson analysis found HERE. They break these loan programs down in pretty good detail. Please work with your banker and accountant to see which of these programs will work for you but I would recommend not ignoring these as it could mean free money for a few months.

Baker Donelson Analysis

SBA Coronavirus Loan Page