Congress has passed and President Trump has signed a law intended to help small businesses with cashflow and liquidity issues caused by COVID-19. Finalized on Friday, March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act is full of provisions designed to help small business — and NFIB has the details that matter most to our members.
How does the new economic stimulus bill affect small business?
NFIB experts have analyzed the CARES Act to discover how our members may benefit from it. The law contains many provisions that are specifically designed to help small business. The most important include:
The centerpiece of the law, the PPP offers federally guaranteed loans that include forgivable qualifying expenses for all small businesses and self-employed individuals. The loans are for 2.5 times average payroll and can be used on expenses incurred between February 15, 2020 and June 30, 2020.
The loans can be totally or partially forgiven for businesses that spend them on qualifying expenses including payroll, benefits, rent, mortgage interest, and utilities in an eight week time period after the loan’s issuance. Whatever part of the loan is not forgiven must be paid back over two years at an interest rate of 1%. These payments, excepts interest, will be deferred for six months and there is no penalty for prepayment.
NFIB has compiled a helpful summary of the program’s requirements and benefits.
The Treasury Department has also issued a program overview and an information sheet for borrowers. NFIB members who are small businesses and sole proprietors may view the application and apply on Friday, April 3, 2020. NFIB members who are self-employed individuals or independent contractors may apply on Friday, April 10, 2020.
Small businesses with non-disaster SBA loans can have their loan payments covered for six months. SBA has yet to issue guidance for this relief, although details are expected soon. NFIB will provide updates as available.