In response to recent Federal Legislation, we have received many inquiries as to how these Acts affect individuals and businesses. This summary is to aid you in determining what benefits may be available to you under these Acts.

Please keep in mind that this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions.

There have been two Acts that were passed by Congress and signed into law. They are:

  • Families First Coronavirus Response Act “FFCRA”
  • Coronavirus Aid, Relief and Economic Security Act “CARES Act”

Most of the inquires we received pertain to the CARES Act so this correspondence will focus principally on that Act.

  • Payroll Protections Program “PPP” – The Treasury Department has authorized $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.
    • Loans 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.
      • Forgiveness is to be based on eligible costs paid during the 8 week period beginning with the loan origination. However, forgiveness is reduced if there is a reduction in the number of employees or a reduction in wages paid. It is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
    • The PPP loans are available to business that were in operation on or before February 15, 2020 with 500 or fewer employees including:
      • Nonprofits
      • Veterans organizations
      • Tribal business organizations
      • Sole proprietorships
      • Self-employed individuals
      • Independent contractors
    • PPP loan applications should be submitted with the required documentation to approved lending institutions. The program is open until June 30, 2020 and has a loan cap of 2 and ½ months average payroll costs subject to a $100,000 annualized cap per employee and a maximum of $10 million. The average monthly payroll costs can be determined in one of three ways.
      • Average monthly payroll for 2019 (possibly the twelve months ended February 15, 2020)
      • Average monthly payroll for the period from February 15, 2019 through June 30, 2019 for seasonal businesses
      • Average payroll from January 1, 2020 through February 29, 2020 for new businesses
    • Small Business Administration “SBA” Economic Injury Loan Programs
      • Small businesses are eligible to apply for an Economic Injury Disaster Loan grant of up to $10,000. Funds should be available within three days of a successful application. For applicants receiving a PPP loan, PPP forgiveness will be reduced by the amount of this grant., and this grant will not have to be repaid.
      • Economic Injury Disaster Loans (EIDLs) – the SBA can provide up to $2 million in disaster assistance to a small business that suffers substantial economic injury as a result of the declared disaster, regardless of whether the applicant sustained physical damage. The purpose of this loan is to provide the working capital needed until the resumption of normal operations, paid sick leave, payroll, increased costs to obtain materials due to interrupted supply chains, to pay obligations that cannot be met due to revenue loss and for other uses, rent or mortgage payments. The loan term cannot exceed 30 years. To qualify for this loan your business
        • must be directly affected by COVID-19 and
        • must have been in business by January 31, 2020

We hope this helps regarding CARE Act assistance that may be available to your business.


Edelson & Company, P.A.