The U.S. Treasury Department issued new guidance on the Coronavirus Aid, Relief and Economic Security (CARES) Act’s $350 billion loan fund for small businesses during the COVID-19 pandemic.
Small businesses, generally meaning those with fewer than 500 employees, and sole proprietorships can apply for loans through the “Paycheck Protection Program” starting April 3. Self-employed individuals and independent contractors can apply starting April 10.
Loans will be given on a first-come, first-served basis.
The loan amounts, which can be up to $10 million, will be forgiven as long as:
- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
- Employee and compensation levels are maintained.
If you are a prospective borrower, contact your current bank to find out if they are participating in this program. For additional assistance, you can also contact your local Small Business Administration office.
Employee Retention Credit
The Treasury Department also launched the Employee Retention Credit today, which you can learn more about here.
The refundable tax credit is 50 percent of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.The credit is available to all employers regardless of size, including tax-exempt organizations.
The Senate Finance Committee released a useful “Frequently Asked Questions” document, which you can find here.
If you have any questions, please email Mike Leonard or call 703-888-7796.