Understanding the CARES Act & how it impacts Small Businesses

By now most everyone has heard of the CARES Act or Coronavirus Aid, Relief, and Economic Security Act. I want to focus on one specific area - the Paycheck Protection Program or PPP. While the PPP was rolled out to support Small Businesses, it created massive confusion and resulted in many Small Businesses being left in the dark. Those hit hardest - Sole Proprietors.

I was surprised to learn that many Sole Proprietors do not think they qualify for this program because as a Sole Proprietor they do not have payroll. ALERT: Sole Proprietors do qualify so if you haven’t already done so, you have until June 30th to submit your application, and I highly recommend you do so! After applying and receiving funds (if funds are still available which has been another ongoing issue with the program), you then need to worry about submitting an application for Loan Forgiveness. This has been a hot topic as the SBA has issued numerous rules - it recently filed it’s 19th Interim Final Rule…that’s right 19th!

These newest changes to the Loan Forgiveness are extremely beneficial as they increase the likelihood that your entire loan will be forgiven. When applying for Loan Forgiveness, you will be submitting the Loan Forgiveness Application through the bank who funded your loan. Most banks are still not accepting these applications as they wait to confirm all changes with the SBA. In the meantime I suggest you review the Paycheck Protection Program - apply if you haven’t already done so and make sure you are tracking all eligible expenses so you can request Loan Forgiveness. Clear as mud? You’re not alone…we have worked with all of our clients and successfully helped all of them receiving PPP Funding….not to mention Economic Injury Disaster Loans/Grants - but that’s a topic for another blog :)