CARES Act Become Law: Provisions for Small Businesses and the Self-Employed (Beware of COVID-19 Loan Scammers!)

By SBE Council at 29 March, 2020, 10:54 am

UPDATED March 30

By Karen Kerrigan-  

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed by President Trump on March 27. The timely implementation is critical to millions of small businesses and self-employed Americans across the country. We know the SBA and U.S. Treasury are working 24/7 to ensure loan applications and capital are efficiently processed. This is a big challenge given the massive demand for capital.

Small business owners need to stay as flexible as possible in terms of how the application process evolves.  For example, given the massive demand for “economic injury disaster loans,” the SBA has moved to a download and upload method for forms when applying for these loans (see the details here.)

Please Note: In a webinar hosted by the Small Business Roundtable and SBE Council on March 27, the SBA warned of loan scams and bad advice!

Yes, this is already prevalent.

Please check sites, advice and other information you may be receiving or seeing with trusted small business organizations, the SBA and your close advisors or tax experts. The SBA processes “economic injury disaster loans” directly, and the SBA 7(a) loan Paycheck Protection Program will be administered through banks, credit unions and other financial institutions approved and qualified through the U.S. Treasury.

See my updated What’s in the Cares Act for Small Businesses, the Self-Employed and Gig Workers here, which covers key details and the links for further specifics.

Senate Committee on Small Business & Entrepreneurship FAQ’s on COVID-19 SBA Loans

The Committee on Small Business & Entrepreneurship of the United States Senate has created a Frequently Asked Questions (FAQs) document on SBA loans related to the CARES Act and COVID-19. The document focuses largely on the new SBA 7(a) Paycheck Protection Program (PPP) loans, as well as issues related to Economic Injury Disaster Loans (EIDLS) and converting these into PPP loans. Read the FAQ here.

Read the Committee’s full guide for small business owners here.

As I noted in a press release following U.S. House passage of the CARES Act: “We look forward to our continued work across the federal government to ensure small businesses receive the financial support they need, and in a timely manner, to make sure the recovery from this crisis is a robust one.”

Many of our members have applied for disaster loans, and we are monitoring the program in order to provide constructive feedback and ideas. If you would like to share your story and experience with us, please email katie@sbecouncil.org and put “SBA Loan Experience” in the subject line. The new SBA 7(a) loan Paycheck Protection Program will be up and running shortly and your experience will also be helpful as we work to convey ideas and feedback to the SBA.

Below you will find new resources to help small businesses dig deeper into the various elements of the CARES Act – the loans, loan forgiveness, new tax credits to retain workers, tax relief and related measures – that support all types of businesses. Of course, we’ll be sharing more information as it becomes available to help clarify the programs, or guidance from federal agencies.

Hang tough and stay safe,

Karen Kerrigan, President & CEO

SBE Council’s COVID-19 Small Business Resource Center

CARES Act: What’s in it for Small Business, the Self-Employed and Gig Workers

Webinar Rewind: What’s in the CARES Act?

The Small Business Roundtable and member groups including SBE Council hosted a webinar on March 27 with the SBA, U.S. Senate staff and small business leaders (including SBE Council president & CEO Karen Kerrigan) who dissected key provisions of the CARES Act. More than 8,000 small businesses registered for the event, so we reached capacity! If you weren’t able to tune in here’s the recorded version.

NEW: The Small Business Owner’s Guide to the CARES Act

From the Committee on Small Business & Entrepreneurship, United States Senate

To help small business owners and entrepreneurs better understand the new programs that will soon be available to them, the Committee has created a comprehensive guide to many of the small business provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These programs and initiatives are intended to assist business owners with the various needs they have right now.

When implemented, there will be many new resources available for small businesses, as well as certain non-profits and other employers. This guide provides information about the major programs and initiatives that will soon be available from the Small Business Administration (SBA) to address these needs, as well as some additional tax provisions that are outside the scope of SBA.

To keep up to date on when these programs become available, please stay in contact with your local SBA District Office, which you can locate here.

See the Guide here.

COVID-19 Strategies: Prioritizing Your Bills When Revenues Are Down

During trying times like these, it’s always a blessing to have long-time friends, supporters and members like Barbara Weltman, founder of Big Ideas for Small Business®. Barbara is America’s leading tax expert and small business adviser. In this timely piece for SBE Council, Barbara reviews bill payment strategies for small businesses. The piece is full of good advice and references new programs in the CARES Act that will help ease the stress of paying bills during this difficult period.

Sign up for Barbara’s Idea of the Day® here. You’ll be glad you did.

COVID-19 Small Business Survival: More News, Tips, Resources and Optimism

During Coronavirus Pandemic, Popular Local Restaurants Pivot to Groceries, WTOP News.

“A chain of popular local restaurants is trying something different to generate income during the coronavirus pandemic.  Founding Farmers has turned its attention to a grocery store-style business model in addition to offering its usual menu items through deliver and carryout services.”

Survivors: Stories of Small Businesses Working to Pull Through Desperate Times, Washington Business Journals. Stories of resilience, grittiness and hope.

These Local Businesses are Repurposing Their Facilities to Assist in the COVID-19 Response, The Medium.

From churning alcohol to churning hand sanitizer, to retooling from metal fabrication to face masks for health workers, these small businesses have pivoted quickly to meet COVID-19 demands.

Businesses Helping Workers, Communities and Each Other During COVID-19, SBE Council.

SBE Council chief economist Ray Keating shares a few examples of how the business community is trying to make a difference in these tough times – for the country, workers, their communities and each other. Keating concluded, “For those of us who understand what entrepreneurs and businesses really are about – that is, ultimately providing what others need or want – then this is not surprising. But it sure is appreciated.”

Philadelphia Launches the COVID-19 Small Business Relief Fund, Littler.

The City of Philadelphia launched the COVID-19 Small Business Relief Fund to assist businesses that are struggling as a result of city- and state-wide mandated business closures.  According to city representatives, over $9 million in economic assistance is available in the Fund.

DC Recovery Small Business Microgrants

The Mayor and the Council of the District of Columbia are investing $25 million in the DC Small Business Recovery Microgrant Program, which will be housed in the Office of the Deputy Mayor for Planning and Economic Development. The microgrants will be available to businesses, non-profits, and independent contractors or self-employed individuals. These grants of up to $25,000 will provide financial support for expenses such as employee wages and benefits, rent, and other operating costs. The application will close at midnight on Tuesday, March 31, 2020.

NYC Employee Retention Grant Program

To help small businesses deal with the impact of COVID-19, the City has launched the Employee Retention Grant Program to help retain employees as businesses face decreased revenue. This program is available to New York City businesses with one to four employees that can demonstrate at least a 25% decrease in revenue as a result of COVID-19. Eligible businesses will receive a grant covering up to 40% of their payroll for two months. Businesses can access up to $27,000.

Florida Emergency Bridge Loans

Small business owners with two to 100 employees located in Florida affected by COVID-19 can apply for short-term loans up to $50,000. These loans are interest-free for up to one year and are designed to bridge the gap to either federal SBA loans or commercially available loans. DEO will work with every borrower to ensure that repayment of the loan isn’t an overwhelming burden. To be eligible, a business must have been established prior to March 9, 2020, and demonstrate economic impacts as a result of COVID-19. The application period ends May 8, 2020. Businesses can apply at FloridaDisaster.BIZ.

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