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CARES Act for Small Businesses – Loans and Grants Now Available for Small Business, Self-Employed and Gig Workers

Breaking Down the CARES Act for Small Businesses

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The CARES Act tasks the Small Business Administration with overseeing the distribution of millions of dollars in loans and grants to help small businesses survive the pandemic. It also provides additional funding for SBA’s Resource Partners to provide advice and training to help small businesses respond to the unprecedented challenges in communities throughout the country.

Check out the video highlighting key points from the CARES Act:

We’ve broken down this information for you visually, step-by-step, with links to the SBA Portal.


What is the Paycheck Protection Program (PPP)?

A new $350 billion loan program at SBA for small businesses, self employed, and gig workers to help them from going under due to the COVID-19 pandemic. If employers maintain payroll, the loans would be forgiven.

Paycheck Protection Program

Who is Eligible for the Paycheck Protection Program (PPP)?

  • Any business concern, nonprofit organization, veteran’s organization, or Tribal business concern that employs no more than 500 employees (or the size standard in number of employees established by the Administration for the industry in which such business operates)
  • Sole proprietors
  • Independent contractors
  • Self-employed individuals

CARES Act PPP

How Does the Process Work?

All current 7(a) lenders are eligible lenders. Plus, the Department of Treasury will authorize new lenders to help expedite the processing and delivery of capital to small businesses.

 

How Can I Apply?

SBA’s Lender Match Portal

Interested borrowers are also encouraged to inquire with a local 7(a) lender regarding whether they are participating in the PPP.
COVID-19 Disaster Loan Application.

Apply for Cares act PPP

How Much?

The size of the loan is 250% of an employer’s average monthly payroll cost during the period Feb. 15, 2019 to June 30, 2019 , capped at $10 million.

CARES Act How Much

How Can I Use It?

  • Employee compensation, including: salaries, wages, commissions, or similar compensation; cash tips or equivalents; vacation, parental, family, medical, or sick leave; payment required for providing group health care benefits (including insurance premiums); payment of retirement benefits; and payroll taxes.
  • Any compensation or income of a sole proprietor or independent contractor no greater than $100,000 in one year.
  • Payment of interest on mortgage obligations, rent, utilities, and interest on pre-existing debt obligations

How can I use the CARE Act PPP

Why a PPP Loan?

  • Employee compensation, including: salaries, wages, commissions, or similar compensation; cash tips or equivalents; vacation, parental, family, medical, or sick leave; payment required for providing group health care benefits (including insurance premiums); payment of retirement benefits; and payroll taxes
    • Any compensation or income of a sole proprietor or independent contractor no greater than $100,000 in one year.
    • Payment of interest on mortgage obligations, rent, utilities, and interest on pre-existing debt obligations.

Why a PPP Loan


EIDL Grants – Economic Injury Disaster Loans

What is an Economic Injury Disaster Loan (EIDL)?

A low-interest, fixed rate loan that can provide up to $2 million in assistance for small businesses that can be used to pay immediate expenses during an emergency.

EIDL Grants

 

What is an EIDL Grant?

The CARES Act creates a new $10 billion grant program, leveraging SBA’ s Office of Disaster Assistance Infrastructure, to provide small businesses with quick, much-needed capital.

what is an eidl grant

Who Is Eligible?

  • Private nonprofit organizations, small agricultural cooperatives.
  • Businesses; cooperatives; ESOPs; and tribal business concerns with 500 or fewer employees.
  • Independent contractors
  • Sole proprietors (whether or not self-employed)

Who is eligible for an EIDL grant loan

How does the process work?

  • Eligible applicants who apply for an EIDL may request up to $10,000 be immediately disbursed. The amount need not be repaid, regardless of the loan decision.
  • EIDL borrowers may apply for the Paycheck Protection Program, but when determining loan forgiveness, the advance EIDL grant is taken into consideration. 

How can I apply?

There are a couple of ways to apply. The SBA has an online portal where small businesses can upload documents and apply for a loan, or they can download the PDF on the agency’s website and mail the forms.

 

How Much Can I Receive from an Economic Injury Disaster Loan?

A million small businesses are eligible to receive up to $10,000.
EIDL Grants loans AZ business

How long will the SBA process take?

The legislation requires SBA to disburse the funds within three days of receiving the application.

How Can an Economic Injury Disaster Loan (EIDL) Be Used?

  • Any allowable purpose under the EIDL program.
  • Provide paid sick leave, maintain payroll, and meet increased costs.
  • Make rent or mortgage payments, and repaying unmet obligations.

how can and eidl be used


HELPFUL LINKS

SBA.GOV

SBA Funding Portal

Disaster Assistance

SBA COVID-19 Disaster Assistance Pages

COVID-19 ECONOMIC INJURY DISASTER LOAN APPLICATION 


CARES Flow Chart EIDL SBA

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26 responses to “CARES Act for Small Businesses – Loans and Grants Now Available for Small Business, Self-Employed and Gig Workers”

  1. Great info. Thank you.

    • Ashok Parikh says:

      I AM A DIRECTOR IN 3 DIFFERENT S CORP WITH FEIN SEPARATE FEIN NO. CAN I APPLY FOR EIDL LOAN/GRANT FOR EACH S CORP SEPARETLY ?

  2. Lori Norris says:

    I am not sure I am understanding completely. I am what I would consider, an independent contractor. I work in a hair salon where I pay booth rental. (J.P. Salon). I don’t qualify for unemployment. Is this ACT something that can help me? I am losing clients and much money. Please tell me how people like myself can get help. PLEASE. I am at a loss as to what to do.

    • Guy Roginson says:

      You should contact the SBA, or your accountant for assistance.

    • Caryn says:

      Independent contractors can apply for unemployment. The new stimulus package specifically includes them. However, states are still waiting for guidelines on how to implement this. If you have stopped working, you should go ahead and apply now and let them catch up.

    • Taylor says:

      You do qualify for unemployment under the new federal government program. They have to deny you on the State side and then give your information to apply for the federal program. You also qualify for these two new programs, EDIL, PPP loan.

      • Mellisa Kay says:

        Thank you. This is so confusing. I am an independent contractor and get paid on a 1099. I applied for unemployment and received a notice today that I was denied because I have no base period wages. So do I wait for them to pass this to federal? We have no income coming in.

    • Cheryl Bosworth says:

      Interested in applying. Owner of hair and nail salon .

  3. Jane Galvin says:

    Our privately owned professional consulting firm (LLP) was impacted with reduced or no work due to Covid 19 in January, 2020 and will be impacted in June, 2020 and possibly for several months after June due to the international work our firm provides.
    Is there any grant/loan program, other than the EIDL Grant program we can apply for?

  4. John Rainey says:

    I applied for the 10K grant 4 days ago and have heard NOTHING! So much for 3 days

    The PPP is going to be a cluster just like the roll out of ObamaCare

  5. Kimathi Thompson says:

    Since my business didn’t really take off until August of last year, sounds like it may not be eligible for the PPP bc no one was on my payroll from 2/15/19 to 6/30/19 for a 250% loan based on my average payroll thru that time period. But what if I had 15 people on my payroll between August, 2019 and March, 2020? Any chance exceptions might be made with documentation to back it up?

    • night0merchant says:

      The federal calculation guidance posts a different calculation method for “new business”, although they didn’t define what counts as “new business”, who can use just Jan 2020 and Feb 2020 to come up with the monthly average. Since my business started July 2019, I plan to use that method instead because it easily qualifies as “new business” I hope. For you, even though you do have 12 months experience…I think it obviously qualifies as new business in this exercise to keep to the spirit of what the loan is about.

  6. Cathia Schmarje says:

    Where do I go to file for the CARES ACT for small businesses? Is the application on-line or do i have to mail it in?

  7. I S says:

    If I started my business within the last 6 months and have only paid individual contractors which will be recorded as 1099 at the end of this year, and had no payroll, or 1099 payments last year. Am I eligible?

  8. Mandy says:

    I have a LLC for flipping homes and rentals and pay all my people 1099’s. How is this taken into account?

  9. Linds says:

    I’m a small 4 person real estate office where all are considered independent contractors. I’m seeking to apply for the 5k grant to pay the rent and insurance. I can’t seem to find anything but paycheck protection and that doesn’t really apply since it is a commissioned base business and agents are only paid upon closing title on a house. How do I apply for the 5K grant?

  10. Connie Ardiff says:

    My employer, a physician in a private practice, has applied for the PPP. Most of the staff’s workdays have been reduced from 4 days/week to one day/week. We have been informed that we must use up all of our PTO hours during this 8 week period. He will pay that PTO with the PPP funds. Is that correct use of this program? Or should we be paid directly for the missed days of work with the PPP funds, thereby allowing us to preserve our PTO time for the hopeful months ahead?

  11. Lori says:

    I started a sewing and crafting business in my home in Jan of 2020. Can I qualify for a grant? I am currently the only employee.

  12. I applied for a Small Business Grant EIDL on 4/9/20 and I have not heard anything yet. I do have my Application #. What is my next step.

  13. nina says:

    How will we jave to pay this money back?

  14. Shantyl Holloway says:

    I am not sure I am understanding completely. I am what I would consider, an independent contractor. I work in a hair salon where I pay booth rental. I don’t qualify for unemployment. Is this ACT something that can help me? I am losing clients and much money. Please tell me how people like

  15. Veronica says:

    I have no idea what exact forms or licenses or whatever are required of me for the sole proprietor “proof of business” section that they want me to send to SBA, and also I just now got my DBA for it, but AFTER already doing my taxes and sending them in under my SSN but I now have a federal EIN… What do I do I need the money asap or my babes and I will be homeless and they will take my babies away forever

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