Coronavirus Aid, Relief, & Economic Securities
(Cares) Act Payroll Protection Loans
The CARES Act which was already passed by the Senate passed in the House of Representatives on Friday, March 27, 2020 and will be signed by the President. Among its many provisions, the CARES Act provides for so-called “paycheck protection loans” to eligible small businesses. These paycheck protection loans will greatly aid employers in retaining their employees so that they will be in the position to get immediately up and running after the pandemic has subsided, which is crucial to facilitating the rebound of the economy and the return to normalcy.
The loans will be granted through the SBA 7(a) program and are limited in amount to the lesser of (i) the average total monthly “payroll costs” for the one-year period ending on the date that the loan was made (an alternative calculation is available for seasonal employers) multiplied by 2.5 plus the outstanding amount of any loan made under the SBA Economic Injury Disaster Loan program between January 31, 2020 and the date on which such loan may be refinanced with this new program; and (ii) $10 million.
* On approved credit