By Amy Varel

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (the “Cares Act”).  The Cares Act contains several provisions that may provide relief for small businesses that have been impacted by Covid-19.

Paycheck Protection Program Loans

The Paycheck Protection Program Loans (“PPP”) are federally guaranteed loans that assist employers with maintaining their payroll during the Covid-19 emergency.  For profit businesses and 501(C)(3) not for profits that have 500 or fewer employees, sole proprietors, independent contractors  and self-employed individuals may apply for PPP loans.  The maximum loan for a business that operated between February 15, 2019 and June 30, 2019 is equal to 250% of its average monthly payroll costs during that time period.  Payroll includes compensation, payment for leave, retirement benefits and health insurance premiums.  There are no collateral or personal guarantee requirements.  There are also no prepayment penalties.  The loan proceeds can be used for payroll costs, continuation of group health benefits, mortgage interest, rent and utilities.  The maximum term of the loan is 10 years and the interest rate is 1%.  Loan payments will be deferred for six months.  The entire PPP loan may be forgiven based on the employer maintaining or quickly rehiring its employees and maintaining salary levels.  Small businesses and sole proprietorships can apply for PPP loans now through an SBA lender.  Recent IRS guidance indicates that independent contractors and self-employed individuals can apply for PPP loans beginning on April 10.  Click here for more information including a copy of the loan application.

SBA Debt Relief Program

The Cares Act also provides that the Small Business Administration will automatically pay the principal, interest and fees of current SBA 7(a), 504 and microloans for a period of six months.  This program does not apply to PPP loans.  Click here for more information.

Economic Injury Disaster Loans & Emergency Economic Injury Grants

The Cares Act also created an SBA Economic Injury Disaster Loan (“EIDL”) that provides an emergency advance of up to $10,000 for small businesses harmed by Covid-19 within three days of applying for an EIDL loan.  The $10,000 advance does not need to be repaid under any circumstance and may be used for payroll, sick leave, increased production costs due to supply chain disruptions, debts, rent and mortgage payments.  Small businesses with 500 or fewer employees including sole proprietorships and independent contractors that have been in operation since January 31, 2020 are eligible for EIDL Loans. Click here to apply for an EIDL loan.

Contact us at MCCM regarding your business needs.

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.

About MCCM

McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979.  With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.

We represent a diverse range of clients located throughout New York State and New England.  They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts.  For more information, please contact us at 585.546.2500.