Feds Enact CARES Act – Borrowers Can Start Applying April 3
The U.S. Senate and the U.S. House of Representatives passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2.2 trillion stimulus package designed to mitigate the effects of the novel coronavirus (“COVID-19”). The legislation includes relief for businesses and individuals, assistance to states, and key protections for workers. At $2.2 trillion in emergency stimulus aid, the bill is the largest emergency stimulus package in United States history. The CARES Act provides, among other things, economic assistance to millions of small businesses. The legislation establishes a $350 billion loan guarantee program to help small businesses keep employees on the payroll and cover necessities such as rent and utilities. If certain conditions are met, the loans are forgivable.
The Paycheck Protection Program, as the small business loan program has been entitled, provides 100% federally guaranteed loans to small businesses. The loans will be available through local lenders and administered by the Small Business Administration. The Treasury Department has released initial guidelines regarding the loan program which are available here. Borrowers can submit an application, available here, starting on April 3rd. More information is available on the SBA website here.