Loan Program Guidance for Small Businesses (CARES Act)

April 2, 2020 · Written By Karen Abusaleh

The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act recently signed into law are intended to assist business owners with the unprecedented financial challenges they are facing as the COVID-19 pandemic continues to unfold. Here we will provide information on the various loan assistance programs available as well as unemployment rule changes through the new legislation.
Small Business Loan Options
Working through temporary cash flow needs is likely one of the highest priorities for small businesses over the next several weeks and months. In the table linked below, we provide more information on the various loan programs for small businesses: Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and Emergency Economic Injury Grants (EEIG). 

The CARES Act: Small Business Loan Guidelines

Paycheck Protection Program (PPP) allows for a small business to obtain a loan calculated using the average monthly payroll costs for the period February 15, 2019 to June 30, 2019. If your company was not in business during that period of time, the period to use for the loan calculation is January 1, 2020 to February 29, 2020. There are no personal guarantees or collateral required for loans under this program. In addition, your company could potentially receive full forgiveness of the loan, provided you retain a full workforce and do not reduce employee compensation levels. If a full workforce is not retained or employee compensation levels are reduced, your company could still qualify for partial forgiveness of the loan. The balance of the loan will be repaid over a period of 10 years at 4%. To apply for this program, you will need to contact an approved SBA 7(a) lender. Businesses have until June 30, 2020 to hire new or returning employees to qualify in the headcount requirements under the Paycheck Protection Program loan forgiveness calculation.

Economic Injury Disaster Loan (EIDL) program provides loans to a small business that is, or will, experience financial hardship due to the COVID-19 government mandated shutdowns. The SBA will determine the amount of the loan based on the economic hardship of the business. These loans may require personal guarantees and collateral. However, EIDL loans are based on your overall company need, not just based on your average monthly payroll costs. There is an advance feature with the EIDL loans. 

Upon submission of your EIDL application, you can request an advance in the amount of $10,000. The government’s goal is to fund the $10,000 advances within three business days from receiving your completed application package and request for the advance. If you are not approved for the loan, you do not have to repay the advance under any circumstance. These loans are offered at 3.75% over 30 years and can be refinanced under the PPP program to take advantage of any potential forgiveness under that program. To apply for an EIDL loan, you will need to complete an online application, Form 4506T, and Personal Financial Statement. You can submit the forms online or mail them to the Small Business Administration.

Changes to the Unemployment Rules Due to COVID-19

  • Bill expands unemployment benefits to cover more workers including self-employed and independent contractors who do not usually qualify for unemployment.
  • Bill provides $600 per week in addition to the regular unemployment compensation for 4 months through July 31, 2020.

If you’re a business owner and currently struggling or anticipate struggling financially, please reach out to us so we can assist with the application process and/or answer any questions or concerns you encounter along the way. We will continue to work diligently each day to provide guidance, support, and peace of mind during this time of great uncertainty. 

We encourage you to forward this to a family member, friend, or colleague you believe would find the information helpful. Clients are encouraged to reach out to Karen Abusaleh to discuss their specific circumstances and needs. She can be reached at 724-383-1734 or at