CARES Act — Small Business Provisions:
Paycheck Protection Program and Economic Injury Disaster Loans
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (H.R. 746, CARES) was signed into law to help individuals, families, and businesses address financial adversity during the COVID-19 crisis. This $2.2 trillion so-called “Phase 3” package is unprecedented in its size and scope. It is likely that Congress will have technical corrections to this bill, as well as new stimulus policy measures that will comprise a “Phase 4” plan in the coming month.
Significantly, the CARES Act provides loan and grant options that were created to help small businesses. In particular, there is a new Paycheck Protection Program (PPP) and new Economic Injury Disaster Loan (EIDL) grants. On April 2, 2020, the Small Business Administration (SBA), the federal agency tasked with administering both PPP and EIDL, issued an interim final rule on the Paycheck Protection Program. Below we provide summary information on each program.