Prepare for April 3rd: U.S. Chamber of Commerce Issues an Emergency Loan Guide for Small Businesses

Yesterday, the U.S. Chamber of Commerce published an updated Coronavirus Emergency Loan Guide for small businesses and sole proprietors.  This is crucial because small businesses (less than 500 employees) can begin applying for payroll loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act Paycheck Protection Program starting April 3rd. Independent contractors and other self-employed individuals can start applying starting April 10th.  The CARES Act allocated $350 billion to help small businesses and nonprofits keep workers employed during this unprecedented pandemic. The Paycheck Protection Program provides 100% federally guaranteed loans to eligible organizations. The loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.  Crucially, the CARES Act has a funding cap, so the Treasury Department recommends applying as soon as possible.

The Guide is colorful, straightforward and is designed to help organizations understand what to expect and how to prepare to file for a loan.  The guide walks readers through the following questions and issues:

  • Is your business eligible for a loan?
  • What will lenders be looking for?
    • And . . . what lenders will not look for (i.e., if you’ve been denied other loans).
  • How much can you borrow (loans can be up to 2.5 times the borrower’s average monthly payroll costs, not to exceed $10 million)?
    • And . . . how to calculate your monthly payroll costs.
  • Will the loan be forgiven?
    • And . . . how it may be forgiven.

The Treasury Department already has the Paycheck Protection Program loan application up online.  It’s time to get started on that application!  Reach out to a trusted advisor, like an attorney or an accountant if you need help.