The CARES Act is a stimulus package designed to address the economic fallout of the 2020 coronavirus pandemic in the U.S. This package includes an SBA loan program to be administered by banks to help with payroll and other operating expenses. We understand you may have questions regarding the loan program as we are waiting for clearer guidelines from the SBA and will provide more information as they become available. Below is a quick overview of the program.
Businesses, self-employed individuals, and 501(c)(3)s that were in operation on February 15, 2020 and were paying salaries and payroll taxes for their employees are eligible, as long as they have less than 500 employees. This number may be higher for select industries where the SBA definition of “small” is higher.
The loan amount is capped at $10 million.
Government guarantee of 7(a) loans would be increased to 100% through December 31, 2020. After that date, guarantee percentages would return to 75% for loans exceeding $150,000 and 85% for loans equal to or less than $150,000.
Eligible expenses are payroll (including paid sick, medical/family leave and group health care benefits); salaries/commissions; mortgage payments; rent; utilities; and any other debt obligations incurred before the loan was taken out.