The CARES Act's economic stimulus package expands
eligibility and other terms of lending programs administered by the
Small Business Administration ("SBA"). The "Payroll
Protection" loan program provides qualified small
businesses and non-profits with favorable loan terms to cover
employee salaries, payroll support (including paid sick or medical
leave), mortgage, rent and utility payments, insurance premiums,
and other debt
obligations. Importantly, a prospective borrower is still
eligible to apply for a Payroll Protection loan even if it has laid
off employees or shut down operations.
We recommend that any business or non-profit considering a loan
under the CARES Act first review the primary features of the loan
program, then drill down to further examine (1) whether it will in
fact qualify as an eligible small business or non-profit and (2)
the maximum loan amount available for borrowing.
