CARES Act Guide for Small Business Owners

Updated: 2020-04-14 at 1:15 PM CST

What is the CARES Act and Payroll Protection Program?

If you own a small business, you may qualify for complete rent and payroll reimbursement from the Federal Government from now until June 30th.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed by the President on March 27th offers short-term financial support for individuals and businesses. Included in the CARES Act is the Payroll Protection Program (PPP), a lending program specifically for small businesses, which will provide $349 billion in relief to eligible companies.

Summary of the Payroll Protection Program section of the CARES Act:

  • Name of the Program: Payroll Protection Program (PPP)
  • Who is eligible: Small Businesses with less than 500 employees
  • Can independent contractors apply? Yes
  • Can sole proprietors apply? Yes
  • Can self-employed individuals apply? Yes
  • Maximum amount each business can qualify for: 2.5 times the company payroll monthly average for the last 12 months
  • When payment is required: it is NOT REQUIRED if the money is used for payroll and rent in 8 weeks after the money is received, and appropriate documentation provided back to the bank who provided the loan
  • Is this the same as the Economic Injury Disaster Loan (EIDL)?" NO – there are also various SBA loans available – see the below link. The PPP is the only one that is currently CONVERTED TO A GRANT if it is spent and documented properly.
NOTE: rent payments capped at 25% of the amount received from the loan.

How to apply for the Payroll Protection Program (PPP)

Step 1) Choose a lender

Start with your current bank - if they are SBA qualified – work directly with them. If they are not an SBA approved bank, a link with SBA banking options is included in the linked resources below.

Step 2) Complete the 2-page form

The application is a quick and easy to fill-out 2-page form – and can be finished in 10 minutes or less if you have the supporting documentation ready when you start.

Step 3) Provide supporting documents

Each lender/bank may slightly vary what is required for supporting documentation. Documentation may include:
  • Payroll tax reports (form 941 for past 4 quarters)
  • Tax returns for last 2 years
  • Current Financial Statement
  • Organizational documents of the Business entity (i.e. formation paperwork from the SOS; LLC or LP doc, etc.)

Help for our clients

If you are a current client, our staff are available to answer your questions about the PPP and CARES Act and help you with the resources needed to apply. Call 1-888-445-9675 to get help signing up for the CARES Act relief program today.

CARES Act and Payroll Protection Program Resources

General Overview of SBA loan options available: https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses -- all applicable links can be found on on the Treasury Department website but to save you time we've listed the key links below.
Summary of the Payroll Protection Program (PPP) [PDF]: https://home.treasury.gov/system/files/136/PPP%20--%20Overview.pdf
PPP Information Sheet for Borrowers [PDF]: https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf