One of the most robust measures provided for small businesses through the CARES Act is the paycheck protection program, according to Joseph Lynyak, partner at Minneapolis-based law firm Dorsey & Whitney LLP, who led a webcast regarding the act on Monday.
The paycheck protection program allows some small businesses to qualify for forgivable Small Business Administration loans, which can be used for payroll costs, medical or family leave costs, insurance premiums, and mortgage or rent payments.
It’s part of the $2.2 trillion CARES Act—the largest aid package in U.S. history—that President Trump signed into law last Friday. Much of the package includes relief for small businesses that have experienced significant disruption as a result of COVID-19, including forgivable loans and tax–deferral options.
The maximum amount a business can receive is the lesser of two options: either $10 million, or an amount equal to 250% of average monthly payroll costs, Lynyak says. The loan funds are intended to cover eight weeks of payroll expenses and any additional amounts for making payments toward debts.