The Coronavirus Aid, Relief and Economic Security (CARES) Act passed this past Friday, March 27, 2020. We believe there are a number of benefits for individuals and small businesses.
In our opinion, the most significant benefit to most small businesses including the self-employed and most non-profit organizations comes in the form of Small Business Administration (SBA) 7(a) Relief Loans offered under the Paycheck Protection Program (PPP).
This program will provide loans to small businesses to cover payroll and other specific expenses for an eight-week period. If the proceeds from these loans are used to pay qualifying expenses, the loans could ultimately be forgiven tax-free with no repayment by the recipient. We expect there will be a substantial number of small businesses interested in filing for these SBA 7(a) PPP loans. Your local banker should be the first place to start. To assist in this process, TMH is working with multiple SBA lenders to help you gather the needed information to go with the PPP loan application. Each bank’s specific list of information will be very similar, although may not be the exactly the same. Therefore, it is important that you obtain the specific list information that your bank requires. This will allow TMH to streamline your business’s information input process and expedite the review/approval process, ultimately speeding up the time for you to actually receive the funds.
Most financial institutions will begin processing PPP loans Friday April 3, 2020. We suggest you begin compiling the information needed to complete the loan application process immediately.
Obtaining loan proceeds under the SBA 7(a) PPP loan program appears to us to be the most comprehensive and least intrusive route to obtaining relatively quick relief from the Federal government, most of which will be forgiven tax-free. We feel like this vehicle will be the primary vehicle from helping retain employees as we all steer through these uncertain times. However, the real stimulus will be received once the loan proceeds are forgiven.
We at TMH are here for you as we walk through the process together. If you have questions or would like more information regarding this opportunity for needed relief, call on us. Considering the anticipated volume of applicants for this loan program, we recommend that you begin the process today contacting us and your banker. Together we can make this happen for you.
There are many other provisions of the CARES Act, and we are consulting clients as it applies to their situation. We would be happy to answer any questions and provide more information as you desire. We encourage you practice all the recommendations directed by the CDC as we go through this COVID19 crisis together.