3 Questions to Find the Right Accounting Partner for Your Construction Business
This article was originally written in October 2020. It has been updated with new references and information.
March 26, 2020 - Late on the night of March 25, the Senate passed the CARES Act to provide emergency assistance to individuals and businesses impacted by the coronavirus pandemic. The $2 trillion bill passed unanimously and is now going to the House of Representatives where House Speaker Nancy Pelosi is expected to take it up soon.
The bill includes a number of tax and non-tax provisions meant to provide relief to those impacted as well as a stimulus to the economy. Below is a summary of some key provisions of the bill.
The bill establishes a “Paycheck Protection Program,” modifying Section 7(a) of the SBA act, to allow loans to businesses with 500 or fewer employees (or, if higher, the standard number employees established by the SBA for certain industries) as well as sole proprietors and eligible self-employed individuals to participate. The loans would be available in amounts up to $10 million based on a formula of the business's payroll and can only be used for payroll costs, benefits, wages, interest, rent, and utilities.
The loan is forgivable to the extent of certain payroll, interest, rent and utility costs incurred during the 8-week period beginning on the date of the loan. However, the amount eligible to be forgiven is reduced if there is a reduction in the number of employees or employee wages over a threshold. There are also certain exceptions for rehired employees. The portion of the loan not forgiven is payable over 10 years at an interest rate not in excess of 4%.
Redpath and Company, Ltd. will follow up with additional details as the bill progresses as well as more detailed articles outlining the key provisions and the impacts to individuals and businesses.
This article was originally written in October 2020. It has been updated with new references and information.
Editor's note: this blog was updated in 2025 with additional resources for business owners.
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