America’s small businesses are the backbone of this country. To aid in the nation’s recovery from the coronavirus pandemic, Congress signed the CARES Act in March 2020. This historic act offers relief for small businesses in a number of ways, allocating $350 billion to support America’s small businesses. This important measure kept many Americans employed during one of the most challenging times in American history. In addition to this Congressional measure, many states offered their own programs.
Although it can be difficult to navigate all of the provisions of the CARES Act, an accounting help support team can help. In this post from Boulay, our Accounting Clarity services experts will break down some of those provisions. Give us a call to find out how you can benefit from the CARES Act.
These are the three main CARES Act provisions that affect small businesses:
1. Economic Injury Disaster Loan Program Changes
The Economic Injury Disaster Loan Program (EIDL Program) was impacted by the CARES Act. EIDL loans cover revenue loss in states and U.S. provinces that have been declared disaster areas. EIDL loans are available in amounts up to $2 million with an interest rate of 3.75 and a 30-year max term. Although loans over $200,000 must be guaranteed by owners with more than a 20% interest, the CARES Act removed the guarantee requirement for loans under this amount.
Prior to the CARES Act, EIDL loans required the borrower to have been in business for at least one year and to not be able to secure loans elsewhere. This has been changed under the CARES Act. Finally, the CARES act allowed for expedited disbursement of up to $10,000 for authorized expenses within three days of a borrower’s request.
2. Paycheck Protection Program
The CARES Act authorized a Paycheck Protection Program that makes forgivable paycheck loans up to $10 million available for qualifying small businesses. If the borrower complies with CARES Act requirements including keeping employees on the payroll, these loans are forgivable.
3. SBA Loan Changes
Under the CARES Act, the Small Business Debt Relief Program provides relief to small businesses with SBA 7(a) loans, microloans, and 504 loans. All loan payments including the principal, fees, and interest will be covered for six months. These changes also apply to new borrowers whose loans were taken out within six months of the CARES Act becoming signed into law.
Accounting Outsourcing for Small Businesses
If you’re a small business owner who has been impacted by the COVID-19 pandemic, Accounting Clarity offers accounting help for navigating the CARES Act. Whether you’re in need of payroll help or other outsourced accounting services, we can help you get the support you need. From CFO services to controller services, we offer a full range of outsourced accounting help. To get your records ready for CARES Act payroll help, give us a call at 952.893.9320 or contact us online today.
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