More on the $2 Trillion Stimulus Act

As you may have heard, The $2 Trillion Stimulus Act was passed by Congress and signed into law by our President over the weekend.
Information about this unprecedented action by the Federal Government to keep our economy moving is still rather sketchy. It is an unyielding 800 page document, that will probably keep me writing for the foreseeable future. But from a small business standpoint, The CARES Act includes $376 Billion for small businesses affected by this national nightmare. One of the parts of this is Access to Capital which falls into three separate and distinct categories.
Paycheck Protection Program
The establishes a new guaranteed loan at The SBA primarily for the purposes of keeping employees on the payroll during this immediate crisis. It provides $349 Billion in forgivable loans if the employer has retained the same number of employees as when they received the loan. If you do, then the loan is forgivable.
Small businesses with less than 500 employees, non-profits, independent contractors and the self-employed are eligible. This also allows businesses with multiple locations that are normally not considered “small” to apply. The bill allows firms to get a loan to cover up to 2.5 months of payroll. The program is open until June 30, 2020.
The loan is made through the SBA’s network of 2,500 7(a) lenders. Please look to see if your existing banking relationship is one of these lenders. If so, you would probably want to contact them directly. This program provides
– A maximum interest rate of 4%
– A loan term of up to 10 years
– Payments that are deferred up to 6 or 12 months
– A portion of this loan can be forgiven if it is spent during the first 8 weeks on operating expenses.
Debt Relief for Current and New SBA Borrowers
The Bill included $17 Billion in debt payment relief. Under this section The SBA will pay principal and interest for the next 6 months on SBA Backed Loans. This includes any new borrowers under the 7(a) or 504 programs.
Economic Injury Disaster Loans
These loans are offered in the event of a disaster. The CoronaVirus Outbreak, has now been declared a national disaster. The CARES Act provides $10 Billion in funding for EIDL’s. These loans include
– A maximum of $2 Million with a term of up to 30 years
– Interest rates are 3.75% for small businesses
– These loans can be approved solely on the applicant’s credit score. A prior bankruptcy does not disqualify you.
– EIDL’s can be approved without a personal guarantee, depending on the amount.
– The requirement that you cannot obtain credit elsewhere has been waived
– There are no loan fees, guarantee fees, or prepayment penalties
– You can receive $10,000 in an emergency cash advance that can be forgiven if it is used for
– Maintaining your Payroll
– Mortgage or Lease Payments
– Paid Leave
– Supply Chain Disruptions
– Obligations that cannot be paid due to Revenue Losses
These $10,000 emergency cash advances can be provided even if you do not qualify for the additional funds.
The way to apply for this is directly to The Small Business Administration at
As of the date of writing this column, this portion of the SBA Online Site was a disaster. Their online application was not working, but you can download a copy of the application and mail it in. My advice would be to apply as soon as possible. Requests for this type of assistance will be immense.
Update on Paid Sick Leave
I would like to thank my Brother Mark who is in the Bowling Alley Business for bringing this to my attention.
This comes directly from the Department of Labor Website. You can read this yourself if you go to
In the covered employees section, it clearly states
“Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closings or child care unavailability if the requirements would jeopardize the viability of the business as a going concern.”
Are you ready for that? Now you tell me. Everything that I read prior to this said that anyone with less than 500 employees had to provide paid sick leave to their employees, no exceptions. But, as with all tax law, they write a law. Then there are exceptions. And if you happen to be in farming, forestry, or fishing, there are even more exceptions.
Now you are going to ask me a reasonable question such as
– How do I qualify?
– What are the exceptions?
The answer is that I have no idea. At the bottom of the web page it states
“Certain provisions may not apply to certain employers with fewer than 50 employees. See Department FFCRA regulations (expected April 2020)”
Isn’t that nice. They are finally going to tell us if we don’t have to provide paid leave, after we have already exhausted our bank accounts, paying it in March. Of course, their advisory will come out in April.
More on this to follow as it becomes available.
I will leave you with this parting thought. This comes from a Facebook Posting from my Brother Faris who is in the Construction Business here in Chicago. This was a letter from F. Scott Fitzgerald, quarantined in 1920 in the South of France, during The Spanish Influenza Outbreak. I quote the ending paragraph…
“The officials alerted us to ensure we have a month’s worth of necessities. Zelda and I have stocked up on red wine, whiskey, rum, vermouth, absinthe, white wine, sherry, gin, and lord if we need it, brandy…”
Thank God I make my own. Here’s my point.
Calm down. We will get through this, and we will get through this together. This isn’t the first time that this has happened, and it probably won’t be the last. It seems to happen every 100 years, or so.
Don’t do anything hasty or ill-advised that will jeopardize the long-term prospects of your business. I’m seeing a lot of you making decisions that are short term in scope, fueled by insanity. Take a moment and relax. If anything, this should be used as a way to regroup or retrofit your business to provide an even greater long-term profit and growth strategy.
The people that will go out of business on this thing are the ones that will lose their heads. Be the entrepreneur that you were born to be.
Turn this crisis into an opportunity.
Be strong. Lead.
As always, Accounting Solutions Ltd. stands ready to protect you, your family, and your business. If you need help, or just need someone to talk to, we can be reached at the number listed below. I’m here, and I remain,
Sincerely yours,
Chris Amundson
Accounting Solutions Ltd.
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