Dear Clients and Friends:

We hope that this finds you healthy, well and hunkered down.  These are potentially very stressful times and, as we've all been acutely aware, the historical times we are living through has resulted in unprecedented disruptions to our businesses and in our way of life. In response to this, Congress recently passed legislation to significantly assist businesses, especially smaller businesses. This legislation is called Coronavirus Aid, Relief, and Economic Security (CARES) Act.

As part of the CARES Act, a new loan program called the Payroll Protection Plan was created to help pay employees, including business owners. It's available to small businesses and provides up to $349 billion dollars in forgivable loans to small businesses to pay their employees during this crisis. Small businesses, sole proprietorships, and individuals who are self-employed or are independent contractors can qualify if they meet certain qualifications.

The great news about this loan program is that if certain conditions are met, the loan can become a grant and is forgivable. This means that the government will pay for your employee's salaries, subject to limitations. The loan amounts will be forgiven as long as:

1.     The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the eight-week period after the loan is made; and

2.     Employee and compensation levels are maintained.

Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high demand for this program, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

The program is intended to go live on Friday, April 3rd for small businesses and sole proprietorships; however, SBA lenders are still trying to "operationalize" it.  It's important to be ready to submit your application as soon as possible. That means getting your payroll and benefits data ready for the application process.

To help you to prepare and to get started, here are links to helpful resources:

  1. Top-line Summary of Program
  2. Information Sheet for Borrowers
  3. Paycheck Protection Program Application Form

Wishing you the best through these challenging times,

David Frees, Douglas Kaune, and Andrew Friedlander



David M. Frees, III
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