Cares Act and SBA Loan Update and Comparison

Changes have been made to both the PPP Loan and the EIDL  program. This chart was update as of July 2, 2020. Recent impovements to the flexibility of the PPP Loan Forgiveness due to recent legislation can be found here: Paycheck Protection Program Flexibility Act Makes Loan Forgiveness Easier

Last week we provided an in-depth analysis of the CARES Act, the SBA’s Business Loan Program and the Paycheck Protection Program. Folks still had questions, so we prepared the comparison chart above to better illustrate the differences and options available.

We also have these additional resources available for you: How the CARES Act amends and expands the SBA Economic Injury Disaster Loan program, what’s included and excluded from payroll costs under the CARES Act, and who is eligible under the CARES Act.

Don't miss out on this opportunity for your business and recovery assistance. We can assist you to assemble, process, expedite and track your application, while monitoring the ever changing disaster loan environment.

CHANGES TO THE SBA’s ECONOMIC INJURY DISASTER LOANS

The CARES ACT amends and expands the SBA Economic Injury Disaster Loan (EIDLs) to include, during the covered period (February 15, 2020 – June 30, 2020), in addition to those already currently eligible, those listed below. EIDLs are now available for all small businesses with fewer than 500 employees, including:
•Sole proprietorships and the self-employed, with or without employees and independent contractors,
•Non-profit organizations, including 501(c)(6)s (Ex: Chambers of Commerce),
•Cooperatives,
•ESOPs, and
•Tribal small business concerns.

Additional changes to the EIDLs during the covered period:
•NO personal guarantees on advance of $200,000 or less,
•NO need to have been in business for at least 1 year prior to the disaster as long as,the business was in operation on January 31, 2020,
•No longer have to exhaust all other avenues of available assistance first,
•Many applicants can be approved based on credit score alone.
 
Can a Business Get BOTH an EIDL and a Paycheck Protection Program Loan? YES!

Small business can get both and EIDL and a PPPL as long as they don’t use them to pay for the same expenses. It’s ok to use the EIDL to cover allowable costs prior to obtaining the PPPL and then use the PPPL to cover all allowable costs thereafter. Additionally, in applying for the EIDL first, a business will end up with potentially greater assistance. Any amount of assistance received from an EIDL will be refinanced by the PPPL in addition to the normal assistance that the PPL provides.

WHAT DO YOU KNOW ABOUT WHAT’S INCLUDED AND EXCLUDED FROM PAYROLL COSTS UNDER THE CARES ACT?

Did you know the term Payroll Costs, as defined in the CARES ACT, means the SUM of any compensation paid by the employer with respect to employees, to include:
•salary, wage, commissions or similar compensation,
•cash tips or equivalents,
•vacation, parental, family medical or sick leave,
•allowance for dismissal or separation,
•health care benefits, including insurance premiums,
•retirement benefit,
•state or local tax assessed on compensation,
•any compensation to or income of a sole proprietor or independent contractor.

DID YOU KNOW, the Compensation of an individual employee “in excess” of an annual salary (as distinguished from total payroll costs) of $100,000, as prorated for the Covered Period (Feb.15, 2020 – Jun. 30, 2020), is excluded from Payroll Costs?

DID YOU KNOW, taxes imposed or withheld for Federal Insurance Contributions ACT (FICA) tax, Railroad Retirement Act Tax, or any Federal employment tax incurred by the employer are excluded from Payroll Costs?

DID YOU KNOW, that any compensation of an employee whose principal place of residence is outside the United States is excluded from Payroll Costs?

DID YOU KNOW, that any qualified sick leave wages and qualified family leave wages for which a credit is allowed under section 7701 and 7703, respectively, of the Families First Coronavirus Act are excluded from Payroll Costs?

DO YOU KNOW WHO IS ELIGIBILE UNDER THE CARES ACT?

Did you know any small business concern, including those identified below, are eligible to receive a Covered Loan if that business concern employs not more than the greater of:
•500 employees; or
•If applicable, the size standard in number of employees established by the Administration for the industry in which the business operates.

DID YOU KNOW that small business concerns classified as Accommodation and Food Services (NAICS 72) that employ not more than 500 employees per physical location of the business are eligible to receive a Covered Loan?

DID YOU KNOW that all sole proprietorships, independent contractors, and eligible self-employed individuals are eligible for a covered loan? Even if the do not have any employees and independent contractors employed.

DID YOU KNOW that all nonprofit organizations are eligible? Even those that are not set up to generate a profits such as 501(c)(6) organizations like the Chamber of Commerce, Trade Associations, Real Estate Boards, Pro Football Leagues, and Boards of Trade, etc.

DID YOU KNOW that Veterans' organizations are eligible? Depending on their organization and purpose, the following sections of the Internal Revenue Code may be recognized:
•501 (c)(2) – Title holding corporations
•501 (c)(10) – Domestic fraternal societies
•501 (c)(7) – Social clubs
•501 (c)(8) – Fraternal Beneficiary societies
•501 (c)(19) and 501(c)(23) – Veteran Organization.
 
DID YOU KNOW that during the covered period, the provisions applicable to affiliations under section 121.103 of the Code of Federal Regulations have been waived solely with respect to eligibility of the following small business concerns:

•Those classified as Accommodation and Food Services (NAICS 72),
•Any small business concern operating as a franchise,
•Any small business concern that receives financial assistance from a companylicensed under section 301 of the Small Business Investment Act of 1958,
•All other business concerns ARE subject to the affiliation provision.

CONTACT US: You have questions, we have answers! Contact Cory Lyon at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or 561-209-1120. Don't miss out on this opportunity for your business and recovery assistance. We can assist you to assemble, process, expedite and track your application, while monitoring the ever changing disaster loan environment.