Federal COVID-19 Stimulus Package

The $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act recently passed by Congress is the largest U.S. stimulus package ever to provide economic relief to businesses and workers affected by the COVID-19 outbreak. The bill offers the following aid for small businesses (those with less than 500 employees), 501(c)3s, sole proprietors and independent contractors. The federal government is currently developing the application process for each program.

Small Business Emergency EIDL Grants

Small Business Emergency Grants are direct grants for businesses that apply for but do not qualify for the Economic Injury Disaster Loan (EIDL).

Paycheck Protection Loans (PPP)

The legislation allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses that maintain their payroll during this emergency. These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

Other Provisions

For borrowers who already had SBA 7A loans in place before COVID-19, $17 billion is allocated to have SBA step in and make six months of principal and interest payments for all SBA-backed business loans.

Payroll Tax Credit

A payroll tax credit for wages paid by businesses that fully or partially close due to Coronavirus.

Payroll Tax Deferral

Allows businesses to a deferral for payroll taxes owed in 2020. Half would be payable in December 2021 and the other half in December 2022. Businesses receiving other EIDL or Paycheck Protection Loans would not be eligible.