BUSINESS GUIDE TO THE CARES ACT by the City of Cleveland

  1. Small Business Administration Economic Injury Disaster Loans
  • Up to $2,000,000 in assistance available per business
  • 75% Interest Rate for businesses, 2.75% Interest Rate for non-profits
  • Other terms case-by-case; up to 30-year term
  • Used to pay fixed debts, payroll, accounts payable
  • Eligible entities that have applied for an EIDL may request an advance of up to $10,000
  • SBA to distribute emergency advance within three days of request
  • Advance may be used towards paid sick leave, payroll, increased costs of materials, rent/mortgage payments, and other obligations
  • Does not need to be repaid!
  1. SBA Express Bridge Loan Pilot
  • Existing SBA Borrowers may be able to access up to $25,000 in funds.
  • Funds can be repaid in full or in part by EIDL proceeds
  1. SBA 7(a) Payroll Protection Program Loan
  • Up to $10,000,000 loan, roughly equal to 2.5x the company’s average monthly payroll
  • Loan proceeds to support payroll (including benefits), insurance premiums, and mortgage, rent, and utility payments
  • Required certifications:
    • Business impacted by COVID-19 economic conditions
    • Use funds to maintain workers and payroll
    • Not receiving duplicative funds from another SBA Program
  • Uncollateralized
  • No loan payments for at least six months
  • Loans eligible for partial forgiveness based on a formula
  1. SBA Existing Small Business Loans Subsidy
  • Applies to existing loans under SBA 7(a), 504, and Micro-loan
  • SBA will pay principal, interest, and fees for existing covered loans for a six month period
  • New SBA loans under these programs (except those under the Payroll Protection Program) will receive six months of payments
  1. Payroll Tax Deferral
  • Businesses can defer payment of the employer’s share of FICA taxes through the end of 2020.
  • Payments must be made in 2021 and 2022.
  • Deferral is prohibited for businesses using the SBA Payroll Protection Program
  1. Employee Retention Tax Credit
  • Eligible entities include businesses whose operation is (1) fully or partially limited by government order, or (2) has experienced a 50% decline in gross receipts from the prior year quarter
  • Eligible for a tax credit of 50% on the first $10,000 of certain wages incurred or paid from March 13,2020 through Dec. 31, 2020.
  • Employers receiving certain SBA loans may not take the credit.