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Paycheck Protection Program

 Previously on March 27, the CARES Act had been signed into law with $376 billion in relief for workers and small businesses. That funding was exhausted quickly. Now, small businesses, including law firms, have another opportunity to apply for loans and grants.
Specifically, the bill provides:
  • $321 billion increase for the Paycheck Protection Program's forgivable loans to cover payroll and other fixed costs for small businesses ($60 billion is reserved for smaller lenders)
  • $50 billion for Economic Injury Disaster Loans for small businesses
  • $10 billion for Economic Injury Disaster Grants - up to $10,000 (limit $1000 per employee)
Information on the U.S. Small Business Administration's (SBA) Economic Injury Disaster Loan (EIDL) and Economic Injury Disaster Grants, as well as the Paycheck Protection Program, can be found here:
The SBA will resume accepting PPP loan applications on Monday, April 27 at 10:30 a.m. EST from approved lenders on behalf of any eligible borrower.  If you have already applied, you can check on the status by calling 1-800-659-2955 24 hours a day, although expect significant wait times.
To apply for the Paycheck Protection Program, contact your lender.  If you do not have one, a list of SBA approved lenders is available here:

Coronavirus Aid, Relief and Economic Security (CARES) Act

In addition to providing a large cash infusion to hospitals and broader access to COVID-19 testing to individuals, the CARES Act aims to boost the economy with over $2 trillion in relief, ranging from individual rebates and small business loans to increased unemployment benefits and a wide variety of tax breaks.
Individual Stimulus Payments
Once the IRS has either your 2019 return, 2018 return, or Social Security statement, it's going to cut you a check for $1,200 (if single/$2,400 if married filing jointly) PLUS $500 for each child under the age of 17. Unlike the initial version of the bill, the payment is in no way limited to your tax liability or dependent on you having earned a minimum amount of "qualifying income."
those on the higher end of the income scale will be shut out of the program because the payment phases out once your "adjusted gross income (AGI)" -- think: total income minus a handful of deductions -- exceeds $75,000 (if single, $150,000 if married). Once over those thresholds, you'll lose $5 of your payment for every $100 your AGI exceeds those thresholds.
Small Business Loans
The CARES Act provides that businesses with fewer than 500 employees -- including sole proprietors and nonprofits-- will have access to nearly $350 billion in loans under Section 7 of the Small Business Act during the "covered period," which runs from February 15, 2020 through June 30, 2020. The loans, which are referred to as "paycheck protection loans" and are fully guaranteed by the federal government through December 31, 2020 (returning to an 85% guarantee for loans greater than $150,000 after that date), are generally limited to the LESSER OF:the sum of 1) average monthly "payroll costs" for the 1 year period ending on the date the loan was made (an alternative calculation is available for seasonal employers) multiplied by 2.5, and 2) any disaster loan taken out after January 31, 2020 that has been refinanced into a paycheck protection loan, and $10 million.
Loan Forgiveness of Paycheck Protection Loans
A separate section of the CARES Act calls for a portion of the aforementioned paycheck protection loans to be forgiven on a tax-free basis. The amount to be forgiven is the sum of the following payments made by the borrower during the 8-week period beginning on the date of the loan:
  • payroll costs (as defined above)
  • mortgage interest,
  • rent,
  • certain utility payments.
To seek forgiveness, a borrower must submit to the lender an application that includes documentation verifying the number of employees and pay rates, and cancelled checks showing mortgage, rent, or utility payments.
Emergency Government Disaster Loan and Grant
The CARES Act also expands access to Economic Injury Disaster Loans under Section 7(b)(2) of the Small Business Act to include not only businesses with fewer than 500 employees, but also sole proprietors and ESOPs. For any loan made under this program before December 31, 2020, no personal guarantee will be required on loans below $200,000. The bill allows a disaster loan to be taken out between January 31, 2020 and the date on which a paycheck protection loan is available for reasons "other than paying payroll costs." Presumably, any loan taken out for payroll purposes will be confined to the paycheck protection loans described above.
In addition, the Act creates a new Emergency Grant to allow a business that has applied for a disaster loan to get an immediate advance of up to $10,000. The advance can be used to maintain payroll, and is not required to be repaid, even if the borrower's request for a 7(b) loan is denied.
Subsidy for Certain Loan Payments
The CARES Act also provides benefits to those with loans under Section 7(a) of the Small Business Act OTHER THAN the new paycheck protection loans, in the form of a government subsidy whereby the SBA will pay six months of principal, interest and fees on qualifying loans.

SBA Loans during Covid 19

Below you will find a Basic Overview of the SBA Loan Program, the NYC Employee Retention Grant Program.
For additional information in applying for the within benefits, or assistance in the application process, please reach my firm
Basic Overview of SBA loans:
  • Can be used to pay fixed debts, payroll, accounts payable, other bills that cannot be paid, and refinance other long-term debts
  • Maximum interest rate for small businesses is 3.75%
  • Maximum interest rate for non-profits is 2.75%
  • Loan terms - maximum of 30 years
  • Loan Amount limit - $2,000,000.00 (loan limit will be waived if business is a major source of employment)
Basic Overview of the NYC Employee Retention Grant Program:
  • Available to small businesses in NYC's five boroughs that have one to four employees, that have been operating for more than six months, and have no current tax liens or legal judgments. 
  • Can be used to cover 40% of payroll costs over the course of two months
  • Loan Amount limit - $27,000
  • Loan Requirement- must be able to show that the business lost 25% of their revenue due to the coronavirus.

Economic Injury Disaster Loan

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