On Friday, March 27, 2020, the United States Legislature passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act). It was subsequently signed by President Donald Trump. The $2.2 trillion stimulus bill should help mitigate the negative impact and economic fallout of COVID-19. The CARES Act holds key provisions relevant to both individuals and businesses.

Small Businesses:

Forgivable loans: 

  • Paycheck Protection Loan Program:
    • There is $350 billion allocated for the Small Business Administration (SBA) to provide loans of up to $10 million per business (with a maximum of 4% interest rate). 
    • These loans may be used to maintain payroll, cover the cost of rent and mortgage, and prevent layoffs and business closures.  
    • Those who qualify for loans must be able to show that they have been substantially impacted by COVID-19. 
    • Companies with 500 employees or fewer that maintain their payroll during coronavirus can receive up to 8 weeks of cash-flow assistance. If employers maintain payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities may be forgiven. 

To Apply:

    • An application must be submitted through a lender who is partnered with the SBA.
    • Borrower Requirements: In making the determination of a borrower’s eligibility for a loan, the borrower has to have been in business since at least February 15, 2020, and have had employees for which it was paying salaries or payroll taxes, or paid independent contractors.
    • Covered loan period begins on February 15, 2020, and ends on June 30, 2020. The application must be submitted during this period. 
    • Lenders decide eligibility, not the SBA. Lenders must waive borrower and lender fees.

Non Forgivable Loans: 

  • Emergency Economic Injury Disaster Loans (“EIDLs”):
    • EIDLs are available to small businesses severely impacted by the COVID-19 emergency in up to $2 million per business (also with a maximum of 4% interest rate). 
    • You must be able to demonstrate that your business does not have sufficient funds or other resources or the ability to borrow from non-governmental sources at reasonable terms for disaster recovery. 
    • The money may be used for any capital needs and financial expenses your business has. 
    • It is important to note that those receiving a loan under the Paycheck Protection Loan Program will not be eligible to receive an EIDL for the same purpose.
  • Grants:
    • The CARES Act also provides an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within 3 days of applying for an EIDL.
    • To access the advance, you first apply for an EIDL and then request the advance, that does not need to be repaid. This advance is meant to be used to help cover the costs of maintaining payroll, sick leave, meeting increased production needs, or other business requirements including rent and mortgage payments.

Relief for existing loans: 

  • There is $17 billion to cover six months of payments for small businesses already using SBA loans.

All Businesses:

Employee Retention Tax Credit for Employers:

  • The bill creates a tax credit for businesses of all sizes that is fully refundable, covering up to 50% of payroll on the first $10,000 of compensation for each employee. This is meant to help businesses that need to close or are distressed to help keep workers on payroll.
  • For employers with more than 100 full time employees, this credit will only be for wages paid to employees when they are not providing services. Eligible employers with 100 or fewer full-time employees can use the deduction even if they weren’t closed.
  • The credit is provided for wages paid or incurred from March 13, 2020 through December 31, 2020.


Americans who filed taxes in either 2018 or 2019 will receive a one-time direct deposit of up to $1,200, married couples will receive $2,400, and an additional $500 per child. The payments will be available for incomes up to $75,000 for individuals and $150,000 for married couples.

The bill also requires all private insurance plans to cover COVID-19 treatments and vaccine and makes coronavirus testing free.

​For any questions, concerns or additional guidance regarding your business and the CARES Act or COVID-19, please do not hesitate to contact our office at 718-402-2240.