The COVID-19 pandemic brought most small businesses across the country to a standstill in just a matter of weeks. The Coronavirus Aid, Relief and Economic Security act (CARES Act) was passed by Congress on March 27. CARES Act is a $2.2 trillion unprecedented financial assistance package aimed at helping small and mid-size businesses survive mandated closures.
According to the Alexandria Gazette Packet, “Prior to the passage of the CARES Act, the Small Business Administration made funds available through its Economic Injury Disaster Loan (EIDL) program. The CARES Act creates a new loan program – the “Paycheck Protection Program” (PPP) Loans. The Paycheck Protection Program loan program will be administered through local banks beginning April 3.”
As per Alexandria Gazette Packet, “Paycheck Protection Program loans may have a principal loan amount of up to $10 million, a term of up to 10 years and an interest rate of no more than 4 percent per annum. Payments can be deferred between 6 months and 1 year. In addition to payroll, the Paycheck Protection Program loans can be used for: payroll support (including paid sick or medical leave); employee salaries; mortgage, rent and utility payments; insurance premiums; and other debt obligations.”