Broker Check

Weekend Reading 4/3/2020... Small Business Relief

April 03, 2020

The S&P 500 Index ended the week down 2.1% on the back of another large weekly jobless number, nearly 10 million people have filed for unemployment over the past two weeks!


Small businesses are being hit especially hard during this outbreak.  Just making payroll, let alone rent and utilities, may be difficult.  The below will focus on one piece of the CARES Act, specifically the Paycheck Protection Program.  If you know someone who has a small business or is a Sole Proprietor, please forward this valuable information. 


The CARES Act allocated $350 billion to help small businesses keep workers employed.  Through the Paycheck Protection Program, small businesses can receive 100% federally guaranteed loans.  These loans can be partially or fully FORGIVEN if borrowers maintain their payrolls. 


See the attached from the US Chamber of Commerce.  This is the best guidance I have seen on the process.  Hopefully it can help you. Chamber Checklist


The program went live today and we are recommending business owners gather the following documentation to prepare for the application process and contact the bank they have their business relationship.  You can find the application HERE:


  • Most recent Form 940, 941, or 944  - Employer's Quarterly Federal Tax Return  
  • Proof of payroll from January 2019 through March 2020 (we expect a 12-month averaging of payroll)
  • Summary of Monthly Expenses to include: rent, utilities, insurance, employee benefits, interest paid, etc.
  • 2019 profit loss statement
  • 2019 year-end balance sheet
  • 1099’s for independent contractors


Below is guidance from the SBA:


Who can apply? All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply.


What can I use these loans for? You should use the proceeds from these loans on your:

  • Payroll costs, including benefits;
  • Interest on mortgage obligations, incurred before February 15, 2020;
  • Rent, under lease agreements in force before February 15, 2020; and
  • Utilities, for which service began before February 15, 2020.


What is my interest rate? 1% fixed rate.


When do I need to start paying interest on my loan? All payments are deferred for 6 months; however, interest will continue to accrue over this period.


When is my loan due? In 2 years.


What do I need to certify? As part of your application, you need to certify in good faith that:

  • Current economic uncertainty makes the loan necessary to support your ongoing operations.
  • The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
  • You have not and will not receive another loan under this program.
  • You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
  • Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
  • All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.



Reach out to us to talk about the process, we will help as much as we can.  Ultimately, you will have to go through a banking institution to submit an application.  So many small businesses have been hurt over the past few week, please spread the word as much as you can as the loans will be given on first come, first served basis. 


Have a great weekend and continue to practice social distancing.  - JR