The provisions of the CARES Act are starting to solidify. Key items to keep in mind:
Loan amounts will be limited to 2.5 times average monthly payroll costs for prior 12 months (including salaries, commission, bonuses, health insurances, retirement payments, time-off payments, etc.).
Salaries, 1099 contractor expense, and owners comp are all limited to $100K per person and all included in Payroll Costs – You can include up to $100K of your documented compensation in the loans and forgiveness as currently written).
Covered period is February 15 – June 30, 2020.
You must have been in business and had employees as of February 15, 2020 to be eligible for CARES Act.
If you have recently received an SBA Disaster loan, make sure to roll that into your application for it to be eligible for forgiveness.
If you have not received funding on an SBA Disaster loan at the time of CARES funding, you may want to cancel Disaster loan – you can’t receive both Disaster and CARES loans that cover payroll.
Forgiveness will occur in the third/fourth quarter of this year based on submission of an application – more on this later.
Funds used for eight weeks of payroll costs, rents, utilities, loan interest will be forgiven – timer starts at funding of loan.
You must maintain staff levels (as compared to last year or first two months of year) and 75% of staff costs to get full forgiveness.
Applications will be accepted as early as next week: You are only allowed to submit ONE application under CARES Act – make sure it is complete and accurate.
Click here to view SBA Loan Information and Application Support
For more info visit RFS Updates