CARES Act gives quick relief to local businesses and the self-employed


The CARES Act recently passed by the U.S. Congress should benefit local businesses, independent contractors and the self-employed who have taken a hit from the coronavirus pandemic. The bill authorizes the expenditure of $349 billion in emergency loans to support small businesses with fewer than 500 employees.

The amount of money available to businesses is two and a half times their average monthly payroll costs up to $10 million, whichever is lower. The loans can be used for payroll, group health benefits, salaries and commissions, mortgage interest, rent and utilities and other miscellaneous costs. The loan will be eligible for loan forgiveness equal to the amount spent by the borrower during an eight-week period after the origination date of the loan on payroll costs and other specified costs. The interest is capped at four percent; payments can be deferred up to six months and the loan is due in two years.

The Act also creates a temporary Pandemic Unemployment Assistance program beginning January 27, 2020 through December 31, 2020, to provide payment to those not traditionally eligible for unemployment benefits (the self-employed, independent contractors, those seeking part-time employment, those with limited work history and others) who are unable to work as a direct result of the coronavirus public health emergency.

The bill also provides funding to support “short-time compensation” programs, where employers reduce employees’ hours instead of laying off workers and the employees with reduced hours receive a prorated unemployment benefit. This provision would pay 100 percent of the costs they incur in providing short-time compensation through December 31, 2020.

Small businesses can begin applying for these loans this Friday, April 3 and the application is now online at More information can be found at If you’re a borrower, go to Borrowers can apply through any SBA-approved lender and the loans are not subject to the regular SBA rules.


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