The new stimulus bill that was signed on Friday, March 27, 2020, known as the CARES Act is a massive and far ranging $2+ TRILLION bill, so it is probably best for us to break it down by sections or likely impacted group. This Act may be cited as the “Coronavirus Aid, Relief, and Economic Security Act.” This post will cover a small business loan program called the Paycheck Protection Program or “PPP”.
The program provides loans for small businesses. The two qualifying factors are the business must generally have 500 employees or less, have payroll cost, and was in operation as of February 15, 2020. The maximum loan amount under this program is 2.5 times the monthly average of the prior 12 months payroll cost. If certain conditions are met and the funds are used for qualifying expenses during an 8 week period beginning on the day the loan is funded, the loan will convert to a grant and will be forgiven. The Treasury will be issuing further guidance in the coming days and the program is expected to be operational very soon. This new program is designed to allow you to keep as many of your employees on the payroll even if your operations are severely limited or closed for a period.