Congress Passes CARES Act – $2.2T Rescue Package for Small Businesses

For clients in the US – Relief is coming soon to help our small businesses stay in business!

Well, if your business is anything like ours, you’re fighting to keep your business open!! The US federal government wants to do something to help and has recently passed a massive $2.2T rescue packages for businesses like yours and ours. If you haven’t had a chance to read through the 880-page legislation, I thought I would share some highlights with you to brighten your weekend and give you a little hope!

Before I continue, I know this legislation only affects our clients here in the United States, and we know that many of our clients are outside the US. It is my hope that your country will soon offer relief to you and to your business as well. My recommendation is to do your research online and talk with your local banker regarding your options.

OK, so here are some highlights on the US Legislation just passed:

  • You will soon (maybe within a week) be able to take out an SBA loan from your local bank, which is 100% guaranteed by the Federal government.
  • Allowable uses of the loan include payroll support – such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments.
  • The max amount that you can borrow is calculated by taking your average monthly payroll expense (before the pandemic) times 2.5.
  • All loan fees are waived.
  • No collateral or personal guarantee is required.
  • BEST OF ALL! If you maintain your employee count at the same level as it was before the crisis began for the eight week period after you receive the funds, then you can have this loan forgiven! If you’ve already laid off or furloughed employees, you’ll need to bring them back on as soon as you start the program.
  • Any loan portion that is forgiven will NOT be considered as taxable income.
  • Any remaining portion of the loan not forgiven is paid back over 10 years at an interest rate not to exceed 4%.
  • This program is available for self-employed businesses as well.
  • You may also receive a deferment on any other outstanding SBA loans that you have for 6 to 12 months.

Don’t pass up this opportunity! This can be a game-changer for your business. It’s like receiving 8 weeks of free labor! (See our other Learning Blog posts on ideas what to do with your staff while your studio is closed, even if they’re working from home). In addition, it provides additional funding to help keep your rents paid and lights on!

Final disclaimer, I’m not a lawyer or banker, so please confirm all the information posted here with your local banker for accuracy.

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