CARES Act Resources for GCA Members*
*The information provided on this site about the government’s response to COVID-19, along with tools and links to access further information, is being made available not only to GCA members, but to all participants in our industry as part of our effort to support our community at this challenging time. We are updating this page regularly, but the fast-moving nature of this situation makes it very difficult to stay ahead. Therefore this material is being provided for informational purposes only, and individuals and companies should seek tax and business planning advice regarding their specific situations. The GCA will continue to offer members-only information and education to support our members; members should monitor their email for these opportunities.
On March 27, 2020 the “Coronavirus Aid, Relief, and Economic Security Act of 2020” (CARES Act) was signed into law. This bill provides more than $2 trillion in relief to mitigate the impact of the coronavirus pandemic on the U.S. economy. The bill augments two prior relief laws that provide important benefits for individuals and small to mid-size companies as well as independent contractors and sole proprietors.
This page will be regularly updated to provide information to inform GCA member companies, their employees and contractors of the resources that have been made available under the law.
Helpful Links – A collection of useful articles highlighting areas of interest for GCA members, their employees, and contractors.
The New York Times – April 16, 2020 Here’s What the Relief Packages Give Self-Employed Workers
The New York Times – May 6, 2020 Small Businesses Counting on Loan Forgiveness Could Be Stuck With Debt
The Hill — October 9, 2020 SBA Announces Streamlined Forgiveness Process for Loans Under $50,000
Important: Legislation Extending Application Period for PPP Loans Signed into Law – On July 4, 2020 the President signed into law, S. 4116, a bill to extend the Paycheck Protection Program through August 8, 2020. The legislation was approved unanimously by the Senate and House earlier in the week. The legislation provides additional time for parties to seek PPP loans for the remaining funding that is available.
Coronavirus Aid, Relief, and Economic Security Act of 2020 Summary – A helpful overview of the key provisions in the CARES Act from GCA’s Public Affairs Committee Chair, Sarah Moe
Families First COVID-19 Constituent Service Resources Toolkit – Provided by Congressional Leadership, this extensive document provides a comprehensive resource for information on the CARES Act and will be updated to include all the latest information as the law is implemented.
Small Business Owners CARES Act Guide – Prepared by the U.S. Senate Committee on Small Business and Entrepreneurship, this is a useful guide for small business owners on the most important elements of the CARES Act
Coronavirus (COVID-19): Small Business Guidance & Loan Resources – A link to the Small Business Administration’s resource page for small business owners
Paycheck Protection Program – A helpful resource on the Paycheck Protection Program in effect from February 15 – June 30, 2020
Unemployment Insurance – The Department of Labor’s Employment and Training Administration (ETA) has authority for implementing the UI provisions of the CARES Act. They have issued the following sets of guidance.
- First ETA guidance from March 22: Talks about state flexibility to determine eligibility for UI
- Second guidance: Summarizes the major UI provisions
- Third guidance: Discusses the mechanics of the Federal Pandemic Unemployment Compensation program
- Fourth guidance: Discusses the Pandemic Unemployment Assistance program and includes clarifying examples
IMPORTANT: SBA Announces PPP Protection Funds Exhausted – The SBA Webpage has announced that funds for the Paycheck Protection Program allocated under the CARES Act have been exhausted and SBA has suspended taking new applications. Applications already submitted will be processed on a first-come, first- served basis.
Legislation to provide supplemental funding for the program is being actively discussed by the Leadership in Congress and the administration and we are monitoring developments closely. There is no clear timeline on when legislation to increase funding will be enacted but anticipate that further funds will be allocated. Here is the notice from the SBA Website:
Coronavirus Funding Options
Our nation’s small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses.
Lapse in Appropriations Notice: SBA is unable to accept new applications at this time for the Paycheck Protection Program or the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.
EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.
IMPORTANT: Congress Enacts Legislation to Replenish the Paycheck Protection Program (PPP) – On Friday, April 24, the President signed into law new legislation to provide additional funding for the PPP.
This legislation provides a further $310 billion for the program that provides forgivable loans for qualified expenses to small businesses and independent contractors. Among the key provisions of the bill related to PPP and related programs are:
- Expand the authorization level for the Paycheck Protection Program from $349 billion to $659 billion.
- Increase the appropriation level for the Paycheck Protection Program from $349 billion to $670.335 billion.
- Increase the authorization level for the Emergency Economic Injury Disaster (EIDL) Grants from $10 billion to $20 billion.
- Allow agricultural enterprises as defined by section 18(b) of the Small Business Act (15 U.S.C.647(b)) with not more than 500 employees to receive EIDL grants and loans.
- Create a set-aside for Insured Depository Institutions, Credit Unions, and Community Financial Institutions for the PPP. Community Financial Institutions are defined as minority depository institutions, certified development companies, microloan intermediaries, and state or federal credit unions.
The section provides additional funding for the PPP through:
- $30 billion for loans made by insured depository institutions and credit unions that have assets between $10 billion and $50 billion
- $30 billion for loans made by community financial institutions, small insured depository institutions, and credit unions with assets less than $10 billion.
Those GCA members with outstanding loan applications are encouraged to follow-up with their lenders to ensure that processing has resumed. Those who are interested in obtaining a PPP loan are encouraged to do so promptly as the program funding is expected to be exhausted quickly and further replenishment is uncertain. Additionally, members may wish to consider one of the financial services technology or “FinTech” companies for a PPP loan as they were only authorized to provide loans shortly before the initial funding was exhausted but do not have the pre-existing financial relationship requirements that some of the large banks have imposed. A list of FinTech providers may be found here.
SBA Provides Further Guidance on Eligibility and Safe Harbor for PPP – The Small Business Administration and the Treasury Department issued an interim final rule on requirements for promissory notes, authorizations, affiliation, and eligibility for the Paycheck Protection Program. Today’s interim final rule supplements previous interim final rules issued on April 3 and April 14 implementing the PPP under sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security (CARES).
Basically, the rule excludes entities like hedge funds and private equity funds or firms in bankruptcy from eligibility for PPP loans but confirms that government-owned hospitals are eligible.
The rule also includes a safe harbor for anyone who took out loans prior to its issuance that repays the loan in full by May 14, 2020.
SBA Releases Forgiveness Application Form and Guidance for PPP Loans – The SBA and Department of Treasury has released the Paycheck Protection Program Loan Forgiveness Application and instructions.
The form provides instructions for borrowers on how to apply for forgiveness in accordance with the CARES Act requirements.
They are expected to release regulations and guidance soon that will further assist borrowers and lenders on requirements.
A copy of the application is available online at: https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf
We will provide further updates on forgiveness guidance from SBA as soon as it is posted.
SBA Expands Safe Harbor for PPP – SBA has released an updated FAQ today that clarifies the issue of demonstrating the appropriate necessity of the loan. The key details are quoted below.
“SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”
SBA Releases Rules Providing Further Guidance for PPP Loan Forgiveness – The SBA released additional guidance on the PPP process today, issuing two interim final rules (IFRs) related to loan forgiveness under the Paycheck Protection Program.
The first IFR provides guidance on the requirements governing the forgiveness of PPP loans for borrowers and lenders. It details the loan forgiveness process and details what payroll and non-payroll costs are eligible for loan forgiveness.
The second IFR describes the SBA process for reviewing PPP loan applications and loan forgiveness applications for borrowers and lenders.
The IFR dealing with requirements governing forgiveness of PPP loans is available at: https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf
The IFR dealing with review of SBA loan applications and loan forgiveness applications is available at: https://home.treasury.gov/system/files/136/PPP-IFR-SBA-Loan-Review-Procedures-and-Related-Borrower-and-Lender-Responsibilities.pdf
SBA Provides Further Guidance on PPP Loan Forgiveness and New EZ and Revised Forgiveness Applications for Small Businesses –The SBA announced newly revised forms for seeking forgiveness of loans as well as a new EZ Forgiveness application for small businesses that will streamline the process for many loan recipients. In addition, the SBA issued further clarification on the ability to receive forgiveness for businesses who do not rehire all workers laid off as indicated in H.R. 7010.
A link to the SBA press release on the new forms may be found here.
This article from the New York Times provides additional helpful analysis of the new guidance and forms.
Legislation Providing Increased Flexibility for PPP Loans Signed into Law – Today (June 5, 2020) the President signed into law H.R. 7010, The Paycheck Protection Program Flexibility Act of 2020. The bill was approved by the Senate via unanimous consent on Wednesday June 3, 2020. It provides PPP loan recipients with helpful additional flexibilities including:
Extending the minimum term for repaying any unforgiven balance to 5 years.
Extending the time period for using loan proceeds to 24 weeks.
Increasing the ratio of forgivable non-payroll expenses to 40% of the loan amount.
The bill also eliminates the prohibition on businesses who had had loans forgiven to defer payment of payroll taxes.
A summary of H.R. 7010 may be found here.
The SBA has confirmed that no PPP loan applications will be approved after June 30, 2020, so anyone interested in seeking a loan should get their application in as soon as possible.