PAYCHECK PROTECTION PROGRAM:
Capital to Help Retain Employees
The CARES Act allocates $349 billion to the Small Business Administration (SBA) for a new Paycheck Protection Program, which will provide for additional loans – via private lenders – of up to 250% of the employer’s average monthly payroll costs (capped at $10 million) if the business maintains payroll through the end of June. The program provides for loan forgiveness for amounts spent on covered expenses, has no fees, and includes deferral options. Click here for FAQs on The Paycheck Protection Program.
DEBT RELIEF ON EXISTING SBA LOANS
The CARES Act provides $17 billion to the SBA to cover six months of loan payments on existing SBA loans, including the 7(a), Community Advantage, 504, and Microloan programs. Contact your lender for more information.
EMPLOYEE RETENTION TAX CREDIT FOR EMPLOYERS SUBJECT TO CLOSURE
Section 2301 of the CARES Act creates a refundable payroll tax credit for businesses that keep workers on payroll that is equal to 50% of payroll on the first $10,000 of compensation (including health care benefits) paid to each employee. The credit is NOT available to employers receiving assistance through the Paycheck Protection Program. The credit is provided through December 31, 2020. Stay tuned for more information from federal agencies.
More information is forthcoming from federal agencies and private lenders.