The CARES Act and Paycheck Protection Program
Yesterday, we presented a webinar explaining the options available under the CARES Act, including the Paycheck Protection Program (PPP), SBA Economic Injury and Disaster Loans and additional unemployment compensation. In order to obtain the forgivable loans available under the CARES Act you must apply through an SBA lender. We have also posted more detailed information from our two experts, Mike Trachtman of Wisler Pearlstine and Mario Vicari of Kreischer Miller:
- Mike Trachtman — CARES Act Information (PDF)
- Mario Vicari — Summary Outline of Federal Stimulus Program for Small Mid-Size Entities under CARES Act (PDF)
As we mentioned on the webinar, the PPP program will be subject to further details. Late yesterday a sample application was posted (the actual application will need to be submitted to your lender) as well as SBA and Treasury Department guidance.
A few highlights:
- The loan amount calculations will use 2019 payroll data
- Loan size is 2 times payroll costs plus 25% (based on the Treasury Guidance; the sample application still says 50%)
- The interest rate is .50% and loan is due in two years
- Payments are deferred for six months but interest accrues during this period
- Loan forgiveness will be focused on payroll expenses
*This Alert is provided for general informational purposes only and does not constitute legal advice.