April 3rd is a big day as it’s the first day in which companies may apply for relief under the CARES Act.  There are five main avenues for businesses to receive liquidity, each with unique characteristics  detailed below.  If you are in need, contact your financial institutions and apply early, as funds are likely to run out quickly!  The application is posted below for your convenience.


1. Treasury Exchange Stabilization fund is available through the U.S. Treasury for midsize and large businesses, including nonprofits and municipalities, affected by the coronavirus.

o Treasury will provide loans and loan guarantees with favorable repayment terms for U.S. domiciled businesses.

o Employers will apply through the U.S. Treasury, which is expected to release details April 6.

2. Payroll Protection Program loans - This loan, which is forgivable if certain conditions are met, is generally available to employers with fewer than 500 employees, with special rules for larger franchises and employers in the hospitality and restaurant industries having more than 500 employees.

o Loans are for payroll and operating expenses and can be up to 2.5x payroll up to $10 million.

o There are no personal guarantees and no collateral.

o Loan amounts used on operating expenses in the eight weeks following the loan are forgivable, unless the employer reduces its workforce or salaries. Employers that have laid off employees or have employees on unpaid furlough can get credit for rehiring employees or increasing salaries before June 30.

o The U.S. Treasury released guidance, including an application, for the Paycheck Protection Program loans provided in the CARES Act. Applications can be submitted beginning April 3, and employers are encouraged to contact their financial institutions and apply early, as funds are likely to run out quickly.


3. Small business disaster loans are currently available through the Small Business Administration for small employers, generally under 500 employees, including employees of affiliates, and can be used for payroll and operating expenses.

o $2 million loan with up to $10,000 advance at application.

o No guarantee up to $200,000.


4. Employers can defer payroll tax payments over two years of the 6.2% employer share of social security payroll taxes on 2020 employee wages paid on or after March 27, 2020, with half required to be paid by Dec. 31, 2021, and half by Dec. 31, 2022.

o Warning: Directors and officers may be personally liable if these amounts are not ultimately paid (and such tax liability is often excluded from D&O insurance policies).


5. An employee retention tax credit is available for employers that have had to suspend operations or have seen a 50% decrease in revenues due to the coronavirus.

o Value is 50% of the first $10,000 of each employee’s wages including health benefits (up to $5,000 per employee) paid between March 12, 2020, and before Jan. 1, 2021.

o Employers with more than 100 full-time employees can take the credit only for employees on paid leave because of the suspension or decline in gross revenue.

o      There are a host of business tax provisions that clients and prospects should discuss with their tax advisors: e.g., net operating loss carrybacks, special interest deduction rules and delay of Q1 taxes.