Updated: Apr 1
The Coronavirus Aid, Relief, and Economic Security Act, also known as CARES Act provides qualifying businesses with forgiveable loans to cover payroll and certain costs, known as the Paycheck Protection Program. The Paycheck Protection Program is designed to incentivize employers to keep their workers employed.
Generally, if the loan proceeds are used to meet the payroll demands and the rules of the program are followed by the employer, the loan principal will be forgiven. For example, the funds must be used for the qualified uses for 8 weeks commencing on the date of the loan and your full time equivalent employees cannot be reduced. No personal guarantees required and no collateral required. The U.S. Chamber of Commerce is collecting information and resources for business owners here.
Be sure to prepare backup documentation to demonstrate payroll costs and keep track of use of funds in order to demonstrate funds were used on qualifying uses. Here is a link to the conditions for loan forgiveness. #Section1105and1106
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