ICAA Webinar: The CARES Act – Financial Assistance Programs for Contractors
Presented by Scott D. Calhoun, Esq. of Hendrick, Phillips, Salzman & Siegel, Attorneys at Law
Tuesday, April 7, 2020 at 2:00 pm EST
Find out how to navigate the new Coronavirus Aid, Relief and Economic Security (CARES) Act, which establishes several financial assistance programs to businesses with less than 500 employees affected by the COVID-19 pandemic. In this webinar, we will review the Paycheck Protection Program, the Economic Injury Disaster Loan Program, the Employee Retention Tax Credit, and the Deferral of Payroll Taxes.
Paycheck Protection Program
Get a Small Business Administration loan to remain operational and keep employees on your payrolls, including loans that can be 100% forgiven. No personal guarantee or collateral is required. The loan can be used for payroll costs (up to a $100,000 annual compensation cap per employee), health care benefits (including paid sick or medical leave and insurance premiums), rent and mortgage obligations, utility bills and interest on debt obligations incurred prior to February 15, 2020. The maximum loan amount is 2.5 times your average monthly “payroll costs” for the one-year period ending on the date of the loan up to $10 million. The loan forgiveness feature transforms these loans into the equivalent of a grant from the government for businesses that commit to keeping the workforce employed.
Economic Injury Disaster Loan Program
No personal guarantees will be required for any of these loans under $200,000 made prior to December 31, 2020. In addition, a new Emergency Grant is available to allow any business that has applied for a disaster loan to receive up to $10,000, and the grant is not required to repaid even if the loan is not approved.
Employee Retention Tax Credit
Businesses that are forced to shut down or suspend operations due to COVID-19, but continue to pay employees during that period, are entitled to a credit against the employer portion of Social Security payroll taxes.
Deferral of Payroll and Self-Employment Taxes
The CARES Act allows employers to defer payment of the employer’s share of the 6.2% Social Security taxes owed.