This is the second of a two part communication regarding the major provisions included in the CARES Act that affect small businesses. The first focused on items 1 and 2 below and can be found on our website. The purpose of this communication is to analyze in greater detail some of the key provisions of the Act that relate to small businesses so that you may gain a greater understanding of how they may impact you and your business interests.
There are four major provisions that are likely to have an immediate economic impact on small business. The CARES Act aims to afford small businesses with welcomed cash flow assistance in four primary ways:
- The Paycheck Protection Program (“PPP”) as part of the Small Business Administration (“SBA”) loan program,
- Emergency Economic Injury Disaster Loan (“EIDL”) grants as part of the existing SBA loan program,
- Delay of payment of employer payroll taxes, and
- Employee Retention Credit for employers subject to closure due to COVID-19
This communication will cover numbers 3 and 4 above. Additionally, an analysis of the employer tax credits and related expansion of family medical and sick leave contained in the Families First Coronavirus Response Act (“FFCRA Act”) effective March 18, 2020 is warranted given those provisions closely tie in with the payroll tax deferral and credits in the CARES Act.
Given the novelty and complexity of these provisions, it is likely that this summary may have generated more questions than answers.