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On March 27, 2020, Congress approved, and the President signed, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide financial assistance to individuals and businesses affected by the virus.

Small Businesses, Sole Proprietors, Self-Employed Individuals, Independent Contractors, and Non-Profit Organizations

Under the Act, $349 billion is available to assist small business organizations including nonprofits, qualified veteran organizations and certain Tribal business concerns employing fewer than 500 employees. Loans are made through SBA-qualified bank lenders. The Act expands the Small Business Administration (SBA) authority through Paycheck Protection Program* loans. 


Right now, there are two loans available for small businesses, sole proprietors, self-employed individuals, independent contractors, and non-profit organizations affected by the COVID-19 disaster: the Paycheck Protection Program (SBA 7a Foregiveable Loan) and the Economic Injury Disaster Assistance (SBA 7b Loans & Advances).

The Payroll Protection Program is a forgivable loan that can be converted to a grant if the funds are used to cover payroll and/or compensation costs which include the lost income of a self-employed individual so it's a very beneficial program for any business owner or individual whose main source of income has been lost or significantly reduced. 


The Economic Injury Disaster Assistance Program includes loans with favorable terms and/or cash advances of $10,000 to business owners including sole proprietors, self-employed individuals, and independent contractors so it's another beneficial program for any business owner or individual whose main source of income has been lost or significantly reduced. 

Business owners are eligible for both programs so it's generally a good decision to apply for one or both. The Paycheck Protection Program is administered through SBA approved lenders which include most banks and financial institutions so your existing bank will likely be a good place to start if you'd like to apply. A link to locate participating banks is included below as well as some additional information about the Program. I've also attached a Factsheet with a range of specific information about the Paycheck Protection Program, as well as the Application Form and a worksheet to help calculate the amount a business owner would be eligible to apply for. 


The Economic Injury Disaster Assistance Program is administered directly by the SBA so you can click here to apply online or at the link below.   


Paycheck Protection Program (PPP)

Program Overview
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program will be available Friday, April 3rdthrough June 30th.

Who Can Apply
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organizations or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.

How to Apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union,  and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. Lenders may begin processing loan applications as soon as April 3, 2020 so you can apply now.

To locate an SBA lender offering these loans, click here or below to search for lenders participating near you.


SBA List of Lenders:  

Loan Details and Forgiveness
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of 2 years and an interest rate of 0.5%.

If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you.


Economic Injury Disaster Loans and Loan Advance

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan and/or Advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.

The $10k loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.

Economic Injury Disaster Loans are also available to residents in declared disaster areas. To view the full list of disaster declarations, click here.

To apply for a disaster loan unrelated to COVID-19, click here.  

Paycheck Protection Program Factsheet, Loan Application & Loan Amount Eligibility Worksheet


As a courtesy for those interested in learning more or applying, attached is a copy of the Paycheck Protection Program Factsheet with more specific and detailed information about eligibility and how the program works, an application for to apply for a Paycheck Protection Forgivable Loan, and a Loan Amount Eligibility Worksheet to help determine how much you may apply for. Paycheck Protection Loans are made through SBA approved lenders which include most banks and financial institutions so your existing bank will likely be a good place to start if you'd like to apply. However, you can locate a list of SBA lenders offering the Paycheck Protection loans near you by clicking here or below.

SBA List of Lenders:  

Other Resources

Small Business Association COVID-19 Resources  

US Chamber of Commerce COVID-19 Resources  

DISCLAIMER OF TAX/FINANCIAL/LEGAL INFORMATION PROVIDED: Any tax advice, financial planning, and/or legal guidance provided at any time is for informational purposes only and provided as a professional courtesy with no guarantees or assurances of its accuracy and consequently should not be used or relied upon without formal consultation by a tax, financial, and/or legal professional. As a result, DAEH LAW, and any of its employees, agents, or representatives are not responsible for any inaccurate, misstated, or incorrect information, advice, and/or guidance and is not liable for any such use of or reliance on any tax advice, financial planning, and/or legal guidance by any person or party that is provided as a professional courtesy for informational purposes only.

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