The Coronavirus Aid, Relief, and Economic Security (CARES) Act – Financial Relief for BusinessesOn April 8, 2020 by Schnader in Client Alerts
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Schnader’s Sarah Hewitt has published a new Client Alert, “The Coronavirus Aid, Relief, and Economic Security (CARES) Act – Financial Relief for Businesses.” It reads in part:
On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) into law – the third piece of federal legislation addressing the COVID-19 pandemic. The CARES Act follows passage of the Coronavirus Preparedness and Response Supplemental Appropriations Act and the Families First Coronavirus Response Act (“FFCRA”). While the first law focused on COVID-19 preparations and the FFCRA focused on paid leave, the CARES Act provides financial relief for small and medium-sized businesses during the coronavirus crisis.
Small and medium-sized businesses affected by the COVID-19 outbreak may find some relief in Title 1 of the CARES Act, which provides $377 billion in funding for loans and other assistance. Title 1 of the CARES Act contains three main provisions which: (1) allocate up to $349 billion through June 30, 2020 in 100 percent federally guaranteed potentially forgivable Small Business Administration (“SBA”) loans to help small businesses keep workers employed amid the pandemic and economic downturn through the addition of the newly-created Paycheck Protection Program; (2) provide $10 billion in direct grants for businesses that do not qualify for the currently-existing Economic Injury Disaster Loan Program (“EIDLP”); and (3) allocate $17 billion to the SBA to provide six months of principal and interest payments for all currently outstanding SBA-backed business loans. This Alert addresses the key details of these three forms of financial relief for businesses.