CARES Act - Navigating Business Relief Options

Jan. 7, 2021 Update: The Economic Aid Act passed on Dec. 27, 2020 extended and revised several CARES Act programs for employers and self-employed individuals. We have not yet updated the following information per the new Act; we're in the process of reviewing the latest guidance and will update this information accordingly. Stay tuned!

From PPP and EIDL to ERC, PEUC and PUA, we've learned a bunch of new acronyms for relief options under the CARES Act, and that's only the tip of the iceberg.

As these relief programs roll out, they seem to raise more questions than answers. We recommend talking to your CPA or a business financial adviser to help you determine the best path for your business. However, it's important to understand your options so you can make an informed decision. 

To help you navigate these financial assistance options, we created this handy CARES Act chart that summarizes four of the primary relief programs:

Economic Injury Disaster Loan (EIDL) & Advance: Provides quick access to working capital; $10,000 Emergency Advance doesn't have to be repaid. Maximum loan amount is $2M, with low fixed interest rate and 30-year repayment.

Paycheck Protection Program (PPP): Forgivable SBA-backed loan that covers 8 weeks of payroll costs and some operating expenses. Loan forgiveness is based on maintenance of staff and compensation levels, and how the funds were used (at least 75% spent on payroll costs).
NOTE: You may use PPP and EID loans together as long as they are used for separate expenses (e.g., payroll only for PPP Loan).

Employee Retention Credit (ERC): Allows a 50% credit on qualifying wages (up to $10K per employee) if your business closed or reduced hours due to an emergency health order, or had significant revenue loss (50% decline in gross receipts). 
NOTE: You cannot use ERC with PPP or EIDL. ERC is not available to self-employed individuals.

Unemployment Insurance Relief (PUA, PEUC & FPUC): Expands unemployment benefits to self-employed individuals and those who have exhausted regular benefits. Also provides an additional $600/week to all claimants during a limited period set by each state. NOTE: Federal unemployment is retroactive to January 27, 2020.

NOTE: You cannot use ERC or federal unemployment relief with other CARES Act financial assistance programs.

CARES Act Relief Options Comparison

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CARES Act Business Relief Options Comparison

Other Business Relief Programs

CARES Act - Employer Payroll Tax Deferral: Defers tax deposits and payments of employer social security taxes (6.2%) owed from March 27 - December 31, 2020; 50% of the deferred amount is due on December 31, 2021, and the remaining amount is due on December 31, 2022. We caution using this option as it's difficult to estimate if you will have the cash to pay the deferred taxes. NOTEPayroll tax deferral cannot be used with the Paycheck Protection Program. 

COVID-19 Small Business Alternative Funding List: The CO Office of Economic Development & International Trade (OEDIT) created this list of alternative funding sources for small businesses.

Disclaimer: This information is provided as a self-help tool and does not constitute legal or financial advice. Laws, regulations and lending products are changing daily and decisions as to whether or how to use this information and/or what actions to take in response to the COVID19 Pandemic are solely those of the employer. The providers of this information disclaim any and all responsibility and liability for its accuracy, completeness or fitness for your particular business purposes.