Congress just passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion stimulus package aimed at helping Americans cope with an economy that is suddenly screeching to a halt. Small businesses, along with millions of employees, have been hit hard
Under CARES, the Small Business Administration’s Paycheck Protection Plan is available to virtually every small business in America. There are two qualifications – businesses must employ less than 500 workers and been in business before February 15, 2020. The loans will sustain small businesses so they can keep workers employed. The loans will be fully forgiven if used for payroll costs and other operating expenses in the 8 weeks following the loan issue date. Businesses with multiple locations in the hospitality and food industry can also qualify if each store has less than 500 workers. To see what’s required, a sample form is available here: https://bit.ly/343elT7, and for more information, please visit: https://bit.ly/2xIqReF
Economic Injury Disaster Loans (EIDL) are also available through the SBA. Loans can be up to $2 million with a 3.75 interest rate on a 10-year term. Once you apply for an EIDL, also consider applying for a $10,000 Economic Injury Grant -- it’s free -- you don’t have to repay it. More information is available at: https://covid19relief.sba.gov/#/
At the state level, $50 million will be allocated to the California Infrastructure and Economic Development Bank to guarantee loans to small businesses that may not qualify for federal funds. California will also allow small businesses to defer payment of sales and use taxes of $50,000 for up to 12 months.
California’s small businesses employ 7 million people, and make up over 95 percent of all businesses in this region. Small business is hurting, millions are losing their jobs, but help is on the way.