Updated: April 7, 2020 at 9:30 a.m. EDT
Senate Majority Leader Mitch McConnell (R-KY), Senate Democratic Leader Chuck Schumer (D-NY), Speaker of the House Nancy Pelosi (D-CA), and Treasury Secretary Steven Mnuchin reached a deal early Wednesday, March 25th, on the “phase 3” Covid-19 crisis response package, using the Senate’s CARES (Coronavirus Aid, Relief, and Economic Security) Act as the base text.
The Senate passed the legislation on Wednesday, March 25th, followed by the House on Friday, March 27th, and President Trump signed the bill into law Friday afternoon.
Final text of the landmark legislation can be found here.
The principal theme of the legislation is immediate financial support to small- and medium-sized businesses.
Senator Amy Klobuchar’s (D-MN) New Business Preservation Act was not included in the “phase 3” bill, but we will continue to push for its enactment either as a stand-alone bill or as part of a “phase 4” crisis response bill, which is already being talked about.
By our review, these are the sections of the legislation (with page numbers indicated) most potentially relevant for small- and medium-sized business, including new and young business.
Sec. 1102: Paycheck protection program, p. 9.
Sec. 1103: Entrepreneurial development, p. 32.
Sec. 1105: Waver of matching funds requirement, p. 41.
Sec. 1106: Loan forgiveness, p. 41.
Sec. 1110: Emergency EIDL grants, p. 66.
Sec. 1112: Subsidy for certain loan payments, p. 73.
Sec. 2102: Pandemic Unemployment Insurance, p. 84.
Sec. 2104: Emergency increase in unemployment compensation benefits, p. 98.
Sec. 2107: Pandemic emergency unemployment compensation, p. 112.
Sec. 2201: 2020 recovery rebates for individuals, p. 144.
Sec. 2301: Employee retention credit for employers subject to closure due to COVID-19, p. 178.
Sec. 2302: Delay of payment of employer payroll taxes, p. 189.
Sec. 2303: Modifications for net operating losses, p. 193.
Sec. 2304: Modification of limitation on losses for taxpayers other than corporations, p. 202.
Sec. 2305: Modification of credit for prior year minimum tax liability of corporations, p. 205.
Sec. 2306: Modifications of limitation on business interest, p. 207.
Sec. 2307: Technical amendments regarding qualified improvement property, p. 211.
Legislative language is arcane and can be hard to understand. To assist your understanding of the contents of the legislation, you can find a summary of Title I of the bill – Keeping American Workers Paid and Employed Act – here.
Here’s a section-by-section explanation of the entire CARES Act.
The U.S. Chamber has put together this splendid guide and checklist for new and small businesses seeking emergency loans and other assistance provided in the CARES Act.
Information regarding the Paycheck Protection Program (PPP), eligibility, and application instructions can be found here.
Here are links to other PPP resources:
- Treasury Department’s PPP Website
- Final Borrower Application Form for PPP Loans
- SBA Interim Rules
- Treasury and SBA Frequently-Asked-Questions Regarding PPP
- Treasury Guidance for Lenders
- Treasury Guidance for Borrowers
- Senate Committee on Small Business & Entrepreneurship PPP FAQs
On April 3rd, our friends at the Economic Innovation Group conducted a terrific webinar entitled “Understanding the Paycheck Protection Program” with Caleb Orr, policy advisor to Senator Marco Rubio (R-FL), Chairman of the Senate Small Business and Entrepreneurship Committee. You can find a recording of the webinar here.
Entrepreneur and venture capitalist Mark Suster has posted this very informative piece on the Payroll Protection Program and VC-backed startups.
Finally, Inc. magazine has a helpful roundup of state by state aid packages.
We will continue to monitor developments and will continuously update details on this page.