Coronavirus Legal Response Team & Resource Center

CARES Act

Key Contacts : Lisa A. Gorab, Peter R. Herman

The CARES Act, signed into law by the President on March 27, 2020, includes a program to provide immediate cash flow relief to small businesses which are suffering due to the coronavirus pandemic.  The relief is provided through loans intended to bridge an employer’s future, short-term cash flow demands through June 30, 2020.  In return for an employer’s general continued employment of workers and sustained wage levels through the covered period (ending June 30, 2020) and compliance with expenditure rules, the loan is eligible for forgiveness.

Specifically, the Paycheck Protection Program is an approximate $350-billion federal appropriation designed to provide that cash-flow bridge.  Through this program, small businesses (generally, those with no more than 500 employees) may apply for a federal loan to fund eight weeks of certain operating costs.  The loans are federally guaranteed and, under certain circumstances, are eligible to be forgiven.  The loans are being administered by the Small Business Administration (SBA) and will be funded by SBA certified banks.

Wilentz attorneys have reviewed the Paycheck Protection Program legislation in detail and are available to discuss how your business may qualify. We are working with many of our business clients to address their questions and explore financing possibilities for their businesses. These questions include:

  • What type of loan is available under the CARES Act Paycheck Protection Program (PPP)?
  • What type of company qualifies under the PPP?
  • How do I apply for a PPP loan?
  • What are the main differences between an SBA Economic Injury Disaster (EID) loan and a PPP loan? Can we apply for both?
  • How do I know how much my company is eligible for as a loan under the CARES Act PPP loan?
  • Am I or my business required to collateralize, or otherwise guaranty, a CARES Act PPP loan?
  • What are the terms of loan forgiveness under PPP?
  • What if all or a portion of the PPP loan is not forgiven?
  • What expenditures are covered under the PPP?

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