Reading Through the CARES Act

See latest updates on my YouTube channel: Mitzi E. Sullivan, CPA

Update: Pages 15-29 – 3/28/20, 12:46 PM

SEC. 1108. MINORITY BUSINESS DEVELOPMENT AGENCY

• Grants are available to minority business centers and minority chambers of commerce to provide education, training, and advising to minority business enterprises and their employees on accessing and applying for resources.

SEC. 1110. EMERGENCY EIDL GRANTS

• EIDL grants are available to small businesses (500 or fewer employees), sole props, independent contractors, coops (500 or fewer employees), ESOPs (500 or fewer employees), tribal small business concerns (500 or fewer employees), private nonprofit organizations, and small agricultural cooperatives.
• Covered period is January 31, 2020 and ending on December 31, 2020.
• No personal guarantee on advances and loans $200K or less.
• No 1-year period in business requirement.
• No unable to obtain credit elsewhere requirement.
• No tax return required for application. Based on credit score.
• Advance of up to $10K may be requested within 3 days of application to pay covered: sick leave, payroll, supply chain interruption costs, rent, mortgage payments and payments on other covered obligations. No repayment of the advance is required.
• Available through 12/31/20.

Deferment of payment, interest and fees on many SBA loans for 6 months.

Pages 1-14 – 3/28/20:

Reading through the new stimulus bill to see what’s included. The CARES Act is over the top. I have taken notes of some of the included information that stood out to me. I’m currently on page 14 of 335 so I will continue to update this post as I read more.

SEC. 1102. PAYCHECK PROTECTION PROGRAM.
• The new PPP loan is available now through 6/30/20 and may be used to pay covered costs for the covered period 2/15/20 to 6/30/20.
• Includes 501(c)(3)s that are exempt under 501(a) (up to 500 employees).
• Includes commissions, cash tips, retirement benefits…
• Includes up to $100K of “net earning from self-employment” – prorated
• Includes small businesses (up to 500 employees) and makes exceptions for others.
• Includes sole props and independent contractors.
• For most, the maximum loan amount will be equal to (average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made x 2.5) + any outstanding (b)(2) Express loans approved or pending during the period 1/31 to the date of the new PPP loan, up to $10M, exclusions apply.
• May be used to pay payroll, benefits, commissions, interest, rent and utilities.
• No personal liability for organizational loans.
• No loan administration fees.
• No personal guarantee for organizational loans and no collateral.
• Terms are 10 years and 4%
• EIDL loans that were already approved or pending during the period from 2/15/20 through 3/27/20 are deferred for 6 to 12 months (no payments or interest due).
• Lenders will be reimbursed.
• Loan application preparer fees will be limited to…(still digging…)
• EIDL loan recipients from 1/31 to the date of the PPP loan are eligible if the EIDL loan is not for purposes covered by the PPP loan.
• No prepayment penalty.
• Express Loan Programs are no longer available.
• Covered costs for an 8-week period will be forgiven, subject to limitations.

Disclaimer: The information provided above is not meant to be legal or tax advise. You should consult your CPA and attorney to determine the best course of action for your situation.

~Mitzi E. Sullivan, CPA

Mitzi E. Sullivan, CPA is a cloud based professional services provider specializing in cloud accounting.

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Author: sullivancpa

With over twenty years in nonprofit, public, and private accounting, Mitzi has developed a strong talent for analyzing financial information and implementing creative solutions. Her technical abilities combined with her experience in working with personnel and clients enable her to offer the sound financial advice and practical accounting solutions that successful entities demand.

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