The CARES Act provides a program for forgivable Small Business Administration loans. The program is available through June 30 for businesses with fewer than 500 employees. The loans are forgivable if they are used for qualifying costs, including:
- Certain payroll costs
- Mortgage interest payments
The amount of loan forgiveness will be reduced if the borrower’s pay to employees is reduced by more than 25% or employee count goes down, with an exception for rehires.
Payroll costs qualifying for loan forgiveness do not include compensating employees with annual salary greater than $100,000, payroll taxes, or mandatory sick or FMLA paid leave which may receive a credit as prescribed by the Families First Coronavirus Response Act.
Amounts forgiven will be excluded from taxable income.
In addition, businesses with less than 500 employees can apply for a disaster loan and request an advance Emergency EIDL grant of up to $10,000 for similar expenses to those listed above. These advances do not require repayment.
States are also coming out with their own grant and loan programs for those in need.
Look for more information on these loans at eidebailly.com soon.