CARES Act Update For Small Business

CARES Act Update for Small Businesses from the Office of Representative Bergman.

The “Paycheck Protection Program” provides eight weeks of cash-flow assistance through 100 percent federally guaranteed loans to small employers who maintain their payroll during this emergency. Please note – If the employer maintains payroll, the portion of the loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities will be forgiven. This provision will help workers remain employed, and allow affected small businesses and our economy to recover quickly from this crisis. This proposal would be retroactive to February 15, 2020, to help bring workers who may have already been laid off back onto payrolls.

Small Business Resources:

The "Small Business Owner’s Guide to the CARES Act" can be found HERE.

The Department of Labor has compiled the Families First Coronavirus Response Act: Questions and Answers Sheet that can be found HERE.  

Fact Sheet for Employees and Fact Sheet for Employers are also available. 

If your small business is struggling due to the recent Coronavirus epidemic:

  • Your business may be eligible for a new Paycheck Protection Loan.
  • This 4% interest rate loan is 100% guaranteed by the SBA.

Who is eligible? 

  • Businesses and 501(c)(3)s with less than 500 employees.
  • Physician practices are eligible, no matter how they are structured.

*Note for the Oil and Gas Industry

Currently, the SBA employee and revenue limits for our industry are:

-1,250 employees for oil production

-1,250 employees for natural gas production

-1,000 employees for drilling operations

-$41.5 million gross revenue for support activities for oil and gas extraction

Where can you get this loan? 

Any existing SBA lenders and any lenders that are brought into the program through the Treasury.

What can you use the loan amount for? 

  • Payroll costs - Group health care benefits
  • Employee salaries - Interest on any mortgage obligation
  • Rent
  • Utilities
  • And any other debt obligations occurred before Feb. 15, 2020.

Click Read More for additional Q&A items

How much can you borrow? 

  • The maximum amount is the lesser of $10 million or 2.5 times the average monthly payroll based on last year’s payroll.

How long will it take to receive the money? 

  • The SBA has authorized lenders to process, close, and service loans without SBA approval, giving you the means to invest in your business immediately.

What if you can’t pay it back? 

  • First, all payments on principal, interest, and fees will be automatically deferred for six months.
  • Second, for businesses that retain their staff up until June 30, 2020, this loan will be forgiven.

Can the entire loan be forgiven? 

  • No, only the portion of the loan used to cover payroll costs, mortgage interest, rent, and utilities can be forgiven.
  • In addition, only 8 weeks can be forgiven.

What does this bill do to provide relief for rural communities and farmers?

  • The bill includes a number of small business provisions designed to help farmers stay in business and take care of their employees during this difficult time. These include provisions that allow farmers to work with their trusted farm credit institutions for the purposes of securing payroll tax loans, along with 1-year deferrals, 100% guarantees, and low rates.
  • The bill provides $14 billion for the Commodity Credit Corporation (CCC), the funding mechanism for all major USDA programs. It also appropriates an additional $9.5 billion to specifically respond to losses due to COVID-19. 

Additional funding is provided for USDA agencies that are on the front lines of responding to COVID-19, including the Food Safety Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the Farm Service Agency (FSA). 

  • The bill also includes $100 million to provide financing for rural broadband through the ReConnect program, and $25 million for the Distance Learning and Telemedicine program to provide grants for equipment and connectivity improvements. 

Employee retention credit – how will this work? 

  • The Employee Retention Credit provides a refundable payroll tax credit equal to 50 percent of up to $10,000 in wages per employee (including health benefits) paid by certain employers during the Coronavirus crisis. 
  • The credit is available to employers: 
  • Wages paid to employees during which they are furloughed or otherwise not working (due to reduced hours) as a result of their employer’s closure or economic hardship are eligible for the credit. 
  • However, for employers with 100 or fewer employees, all employee wages qualify for the credit, regardless of whether they are furloughed or face reduced hours.
  • To prevent double-dipping, employers that receive Small Business interruption loans are not eligible for the credit. Additionally, wages that qualify for the required paid leave credit are not eligible for the credit. 


Some additional resources can be found below:

CARES Summary of Health, Tax, Unemployment, Small Business, and Distressed Industries Provisions

CARES Act Small Business Frequently Asked Questions (FAQ)

CARES Act Paycheck Protection Program and Loan Forgiveness

CARES Act - Detailed Funding Summary

CARES Act - Appropriations Highlights

CARES Act Education and Labor Provisions

CARES Act Transportation and Infrastructure Committee Related Provisions

CARES Act - Jobs & Economic Importance of U.S. Infrastructure Network

CARES Frequently Asked Transportation Questions

Michigan Petroleum Directory Now Available!