On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted by the federal government to provide emergency economic assistance to those affected by the novel coronavirus (COVID-19). The CARES Act provides provides finacial stimulus to employees, small businesses, and non-profits in response to the economic distress caused by the coronavirus (COVID-19) pandemic.
The CARES Act creates a $349 billion loan program for small businesses, including 501(c)(3) non-profits. These loans can be forgiven through a process that incentivizes small businesses to retain employees. Section 1102 of the CARES Act established the Paycheck Protection Program as a new SBA loan program in Section 7(a) of the Small Business Act. The maximum loan amount is 2.5x the average monthly payroll costs of the borrower, up to $10 million. Loan proceeds may be used for payroll costs, health care benefits, employee salaries and compensation, loan interest, rent and utilities. Loans are available for up to a 10-year term (amortized) at an interest rate not to exceed 4%, with six months (and up to one year) deferral of principal and interest payments.
Section 1106 of the CARES Act provides for loan forgiveness of Paycheck Protection Program Loans for loan proceeds expended on payroll, mortgage interest (query if other unsecured loan interest is eligible, not included in legislation), rent and utility payments, during the 8-week period beginning on the date of the funding of the loan. The forgiveness amount is subject to reduction if there is a workforce reduction or a reduction in the salary or wages of an employee.
As more information becomes available Jubilee Impact Fund will post it here.