On Friday, President Trump signed the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act. Under the CARES Act, the Small Business Administration will be offering loans under the Paycheck Protection Program (PPP) to small businesses (including sole proprietorships and independent contractors), certain nonprofit organizations, veterans organizations, and Tribal business concerns. The PPP is designed to incentivize businesses to keep their employees and to not implement steep pay cuts during the coronavirus pandemic.
There are several details within the CARES Act that are unclear at this point. We also do not yet know exactly how the loan application process will work or what the timeline will be, although we know that the loans will be made through SBA approved banks. We expect certain details of the PPP to become clearer as the SBA develops its final regulations, which the legislation requires to be completed within 15 days.
Following are the major features of the Payroll Protection Program:
HoganTaylor has assembled a team to monitor developments in financial assistance available to businesses hurt by the COVID-19 pandemic. We have been working to understand this new legislation so that we can provide relevant and timely advice to our clients. As more information becomes available regarding the PPP, we will be recommending specific actions to take now to prepare for the application process.
We will also be advising businesses on best practices to ensure that appropriate information is captured, and records are maintained, to ensure maximum possible loan forgiveness.
