CARES Act First Look


Senator Cardin detailed the measures being taken in the upcoming relief bill to help small businesses on the Senate floor today.

There will be three major grant programs aimed at providing small businesses necessary relief.

The first is $350B for companies with fewer than 500 employees

To trigger these, a business simply applies for a 7a loan through their financial institution. These loans will be 100% guaranteed by the federal government, all fees will be waived, and payments will not be required for a year. Importantly, all debt incurred by the business will be forgiven if they maintain or return their workforce to pre-pandemic levels. The amount of money available to a business will be 2.25 times their average monthly payroll before COVID.

The second is $10B in grants for emergency cash availability.

 This will be to buffer companies’ liquidity in a timeline that is more urgent than the above program will cover. The funds can be an immediate cash advance on the above program and the SBA will have the capability to write checks up to $10K within 3 days of applying.

The third is $17B in relief for existing 7A and 504 loans.

Payments on existing 7a and 504 loans will not need to be made for 6 months.  The Senator specifically used the word forgiven.

A tax credit, called the Employee Retention Tax Credit (ERTC), is also being implemented. A business is eligible for it by ringing back furloughed or laid-off employees. They will then receive a tax credit of 50% of the employee’s wage for a maximum of up to $10,000 as a credit. The ERTC is presented as an alternative to the payroll grants listed above. Businesses will have the freedom to choose the option that’s a better fit for them.

The Senator also said that self-employed, independent contractors and gig economy workers will be fully covered under both the small business and unemployment provisions of the bill.

You can watch the Senator’s speech here. (Note: you’ll need to link a television subscription with C-Span to watch the video)

The Senate is expected to vote on and pass this bill before the day is done, with the House following shortly after.