Bailout and payroll

The way its written in the Senate bill is that it will be SBA backed loans from banks that get converted into grants for the amount of the loan that qualifies (payroll, mortgage, utilities etc). Interest rate capped at 4%, no origination fees, and deferred payments for 6 months. No personal guarantee or collateral needed.

So basically you go to your bank/credit union and apply for the loan and certify its for the CARES Act. This wont be available yet as the bill is still currently winding its way through congress. I don't see dems/repubs changing the provisions for small business significantly so it will most likely remain as its currently written. As soon as it passes im making an appointment with my bank to get the loan app started. They do my payroll for me anyways so it should be pretty simple.

SEC. 1106. LOAN FORGIVENESS. 10(a) DEFINITIONS.—In this section— 11(1) the term ‘‘covered loan’’ means a loan guaranteed under paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102;

(b) FORGIVENESS.—An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period: (1) Payroll costs. (2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation). (3) Any payment on any covered rent obligation. (4) Any covered utility payment.
(1) IN GENERAL.—Amounts which have been forgiven under this section shall be considered canceled indebtedness by a lender authorized under section 7(a) of the Small Business Act (15 U.S.C. 19636(a)).

THIS IS A HANDOUT TO US, THE SMALL BUSINESSES

page 10 lines 1 through 3

(iii) the term ‘covered period’ means the period beginning on February 15, 2020 and ending on June 30, 2020;

 

This is for businesses to pay for payroll, mortgage, rent, utilities etc. It's basically meant to keep business from laying off workers since it covers the payroll costs which are usually the biggest expense.