COVID-19 CARES Act: Critical Updates & Lessons Learned
The Coronavirus Aid, Relief, and Economic Security (CARES) Act has brought some much-need relief for many small businesses who are struggling with the impact of the novel virus on their operations. In this blog, our sister brand, Bridgepoint Consulting, provides some key updates on the latest developments around this new federal funding and helpful lessons learned from working with clients to navigate the submission process.
COVID-19 CARES ACT: CRITICAL UPDATES & LESSONS LEARNED
BY LUCAS WALTERS
As Americans continue to respond to the COVID-19 pandemic and its impact on businesses and individuals nationwide, the economic relief provided in the form of the CARES ACT, has become increasingly challenging to navigate due to frequent updates.
HERE ARE SOME TIPS TO HELP AVOID SOME OF THE LOAN APPLICATION PITFALLS, AS WELL AS USEFUL INFORMATION TO GUIDE YOU TO THE LOAN PROGRAM THAT FITS YOU BEST:
PAYCHECK PROTECTION PROGRAM (PPP)
Update: As of April 16, 2020: “The SBA is currently unable to accept new applications for the Paycheck Protection Program (PPP) based on available appropriations.” https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp
As of April 20, 2020: Lawmakers on Capitol Hill are expected to approve an additional $300 Billion for the PPP program.
- The SBA is continuing to process applications that have been submitted but not funded, on a first-come, first-serve basis.
- Businesses that participate in this program and receive funding will be eligible for forgiveness. This requires an application to the lender that funded the loan, showing:
- A) Documentation of payroll data for all employees covered
- B) Documentation of payments made to cover mortgage and lease obligations as well as utilities
- C) Certification by a representative of the business that the documentation was true and funds were used according to the guidelines
LESSONS LEARNED:
- Banks are also requiring additional documents such as:
- Corporate documents- Articles of Incorporation, Certificates of Formation, and any other Governing documents
- 2019 IRS Form 941s and 944(if the business has employees)
- 1099-MISC if the applicant is an Independent Contractor
- 2019 IRS Form1040, Schedule C and 1099-Misc if the applicant is self-employed
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