The SBA CARES Act

On March 27, Congress passed and President Trump signed into law the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act) — a significant piece of legislation that provides approximately $2 trillion of economic assistance in various forms to both consumers and businesses.

As a part of CARES, the Small Business Administration (SBA) also created the Paycheck Protection Program which offers up to $350 billion in loans under very attractive terms to help businesses retain valuable workers. The main criteria is that the business must have a maximum of 500 employees, but besides payroll, proceeds can also be used for rent, utilities, healthcare costs and more. The SBA has also expanded several of their other ongoing programs, including the Economic Injury Disaster Loan program.

The federal government is currently finalizing the game plans about when and how many of these different programs and relief will be implemented, and has named Bank of America as a financial facilitator institution to assist with the execution of these programs.

Note that some documentation will still be required when applying, but the normally stiff requirements have been significantly relaxed.

For example, plan on gathering the following information about your business:

  • Payroll records — 2019 through current.
  • Contractors  — IRS Form 1099’s for 2019 employees and independent contractors that would otherwise be an employee of your business (this one is a bit complicated – better to look up more on this at https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.
  • Healthcare costs — Gather your payment records for all health insurance premiums paid by the business owner under a group health plan. Or maybe ask your insurance agent for a statement of billings and payments.
  • Retirement — Also be able to break out and show your company’s retirement plan funding plan.
  • Standard Financial Statements – Profit and Loss statements, balance sheet and certain detail for 2017, 2018 and 2019. In many situations your tax returns will be fine for this.  And for 2020 interim statements (for most, this will be January 1 2020 through March 31 2020).

Free QuickBooks Loan Application Help (QuickBooks Online or QuickBooks Desktop)

QB-LA QuickBooks Los Angeles can help – we offer free assistance to small businesses applying to the Los Angeles City Small Business Emergency Microloan Program.  Just contact us by emailing asap@qb-la.com or call 310 281 6161. We will be especially helpful for those with QuickBooks Desktop or QuickBooks Online accounting systems (for example, these accounting systems may often require updating or generating various financial statements and reports).