{"id":1316,"date":"2020-04-20T16:37:41","date_gmt":"2020-04-20T21:37:41","guid":{"rendered":"https:\/\/northone.com\/blog\/?p=1316"},"modified":"2020-05-11T19:18:44","modified_gmt":"2020-05-12T00:18:44","slug":"cares-act-paycheck-protection-program-gives-stimulus-aid-to-small-businesses","status":"publish","type":"post","link":"https:\/\/www.northone.com\/blog\/financial-management\/cares-act-paycheck-protection-program-gives-stimulus-aid-to-small-businesses","title":{"rendered":"How the CARES Act Paycheck Protection Program Can Help Your Small Business"},"content":{"rendered":"\n

<\/span>Overview of the CARES Act <\/strong><\/span><\/h2>\n\n\n\n

If you\u2019ve been too busy worrying about the global pandemic and staying sane during lockdown to pay much attention to the news, you might not have heard about the CARES Act. Here\u2019s a quick rundown of the Act and what it might mean for you. <\/p>\n\n\n\n

On March 27, the US government signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law. This $2 trillion relief package was created to help individuals, businesses and government organizations make it through the pandemic. There are many components of the CARES Act, but if you are a small business owner, the part that is most relevant to you is the payment protection program. <\/p>\n\n\n\n

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<\/span>How Will the Paycheck Protection Program Help Small Businesses?<\/strong><\/span><\/h2>\n\n\n\n

The main purpose of the SBA payment protection program<\/a> is to provide an incentive for business owners to maintain payroll during the pandemic. Traditionally in times of financial hardship, the first thing businesses will do to save money is cut down on payroll. The government brought in the PPP loan as a way to prevent mass unemployment across the country. <\/p>\n\n\n\n

As a further incentive, the PPP loan can be 100% forgivable if the bulk of the money is spent on payroll. For those that need to use the money elsewhere, repayment can be deferred 6 to 12 months, giving businesses the chance to get back on their feet before they have to start repaying the loan. <\/p>\n\n\n\n

<\/span>What is the SBA? <\/strong><\/span><\/h3>\n\n\n\n

The SBA is the Small Business Administration. Their mission is “to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters”. <\/p>\n\n\n\n

To put it more simply, the SBA helps small businesses by providing them with funds to grow, and assist in times of crisis. <\/p>\n\n\n\n

The SBA is providing a number of assistance options during this pandemic<\/a>, most notably they are in charge of distributing the Paycheck Protection Program Loans<\/a>. On the 16th of April 2020, the US government announced they had exhausted the first round of funding for the SBA Paycheck Protection Program. However, only five days later, it was announced the program would receive an additional $310 Billion in funding. You can sign up for North One\u2019s SBA PPP loan waitlist to secure your place in line for the second round of funding. <\/a><\/p>\n\n\n\n

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<\/span>Paycheck Protection Program vs Economic Injury Disaster Small Business Loan Program <\/strong><\/span><\/h2>\n\n\n\n

If you are unable to secure a relief loan for your business through the Paycheck Protection Program, the SBA also provides funds through the Economic Injury Disaster Small Business Loan Program. <\/p>\n\n\n\n

The Economic Injury Disaster Small Business Loan Program was initially designed to cover any financial losses caused by disasters such as floods, hurricanes and fires. Since the outbreak of COVID-19, the program has been extended to cover economic injury caused by the pandemic. To learn more about applying for the SBA Economic Injury Disaster Small Business Loan, visit the SBA website. <\/a><\/p>\n\n\n\n

If your business has suffered as a result of COVID-19 we recommend you apply for both the SBA\u2019s PPP and EIDSBL. However if you do receive loans from both programs ensure you use the PPP for payroll, and the EIDL for other business expenses. <\/p>\n\n\n\n

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<\/span>What Small Businesses are Eligible for PPP?<\/strong><\/span><\/h2>\n\n\n\n

If you are considering applying for a PPP loan, you\u2019ll want to be prepared, after all, the first round took less than two weeks to run out. <\/p>\n\n\n\n

We recommend signing up for North One\u2019s SBA PPP loan waitlist <\/a>to ensure you are in a good position for the second round of funding. <\/p>\n\n\n\n

If your business meets the following criteria you can apply for the SBA PPP loan waitlist. <\/p>\n\n\n\n