Small business relief from the CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act has appropriated more than $350 billion in funds for small businesses and the Paycheck Protection Program and Health Care Enhancement Act has appropriated an additional $310 billion for the Paycheck Protection Program (PPP), an additional $50 billion for the Economic Injury Disaster Loans (EIDLs) and an additional $10 billion for the EIDL grant program. To help you understand and determine the potential options for your business, we've outlined two options for financial relief, both administered through the U.S. Small Business Administration (SBA).

This information is not intended as financial, accounting, legal, or tax advice. See Disclaimer. Readers should seek specific financial, accounting, legal, and/or tax advice from a qualified professional before acting with regard to the subjects mentioned herein.


Additional Highlights from the CARES Act


Over $300B in relief for you and your customers is coming

American singles making $99k or less, or households making $198k or less, should see funds in the coming weeks.   


Businesses are getting a tax break

Certain business and income taxes will be deferred, and the extended due date to file a 2019 tax return is July 15, 2020. The ability to use certain tax benefits such as net operating losses (NOLs) and alternative minimum tax (ATM) credits has also been refined with an aim to provide near-term liquidity.


Plus, additional support for our communities

There will be vastly expanded unemployment benefits, support for our healthcare system, and more.


Understanding the new loans


Notice: As of April 24, 2020, additional funding has been appropriated for the PPP (in an amount of $310 billion), the EIDLs (in an amount of $50 billion) and the EIDL grant program (in an amount of $10 billion).  Of the funding available for the PPP, (a) $30 billion is set aside for loans made by lenders with assets between $10 billion and $50 billion and (b) $30 billion is set aside for loans made by lenders with assets of less than $10 billion. Concerning EIDLs and EIDL grants, the SBA will only accept new applications from agricultural businesses at this time –applications that have already been submitted will continue to be processed on a first-come, first-served basis. We encourage you to contact your lender about the PPP and EIDL (including to submit a new application or to check the status of a pending application). 

You can apply for both EIDL and PPP loans as long as they do not pay for the same expenses. Before taking both, talk to your lender or a financial advisor.

The overall package is pending further guidance from the Small Business Administration (SBA), but there are steps to take now. While your circumstances may affect your loan eligibility, we hope this informational resource helps you better determine whether to pursue these options and we encourage you to seek personalized advice from your lender or qualified professionals.

General details about loan options are included below – for more details, see the Treasury’s FAQ and additional FAQ’s.

Option 1 - Economic Injury Disaster Loans ("EIDLs")

Get a $10,000 advance in 3 days or less

The Economic Injury Disaster Loan (EIDL) is an emergency program intended to offer small business loans up to $2M (with an interest of 3.75% and a repayment term up to 30 years) to cover ordinary and necessary business expenses during certain disasters and emergencies. It also includes a grant for eligible businesses to receive a cash advance of up to $10,000 that you're not required to repay.

There have been recent reports, however, that (i) the SBA has unofficially capped the maximum loan amount to $150K per applicant and (ii) the advance will provide $1K per employee up to a maximum of $10K based on the number of your employees as of January 31, 2020.



Option 2 - Paycheck Protection Program ("PPP")

Get up to 24 weeks of operating expenses back

The Paycheck Protection Program (PPP) offers approved business owners 100% federally guaranteed loans up to $10M (with an interest rate capped at 1.00% and a minimum repayment term of 5 years) and forgives up to the amount spent (or incurred) on certain operating expenses (i.e., payroll costs (including compensation to furloughed employees, bonuses and hazard pay, in each case, up to $100K on an annualized basis), rent obligations on real and personal property, utilities and interests on mortgage obligations on real or personal property during the first 24 weeks after lender’s first disbursement of loan or, alternatively, solely for borrower’s with payroll cycles that are bi-weekly or more frequent, the 24-week period beginning on the first day of the first pay period following disbursement of the loan (so long as, with respect to incurred expenses, payment is made on the first payment date following the applicable 24-week period); provided, however, that (i) if the foregoing 24-week period extends beyond December 31, 2020, the applicable forgiveness period will be the period beginning on the date of first disbursement of loan and ending on December 31, 2020 and (ii) any borrower that received a loan before the enactment of the Paycheck Protection Program Flexibility Act of 2020 may elect the forgiveness period to be the first 8 weeks after lender’s first disbursement of loan. 

At least 60% of the  loan proceeds must be used for payroll costs to qualify for loan forgiveness. Current SBA guidance requires at least 75% of the loan proceeds to be spent on payroll costs but we expect that this requirement will adjusted down to 60% to match the forgiveness threshold.  The loans can be deferred until the date on which the amount of loan forgiveness is remitted to the lender by the SBA (with interest accruing during deferment). If a borrower fails to apply for loan forgiveness within 10 months after the last day of the applicable forgiveness period, the borrower must begin to make payments of principal, interest, and fees on its loan after such 10 month period.  The repayment term of any loans preceding the enactment of the Paycheck Protection Program Flexibility Act of 2020 may be modified by mutual agreement between borrower and lender to conform to the 5-year minimum term.




Tax Specific FAQs

Information relating to business tax provisions, social security tax deferral and employee retention credit considerations under the CARES Act can be accessed here.

Business Tax Provisions FAQs

Social Security Tax Deferral FAQs

Employee Retention Credit FAQs | IRS Summary and FAQs


SBA Loan Guidance and Resources

Visit The Small Business Administration (SBA) for updated guidance on COVID-19 resources.

You can find your local SBA District Office for assistance and also search for a Small Business Development Center (SBDC) in your area. SBDCs are able to answer your questions, provide no-cost business consulting, and offer low-cost business training in partnership with the SBA. 

Additional SBA links:

View other Coronavirus relief options

View the most active SBA lenders and use the SBA’s lender match tool to find a lender.



Main Street Lending Program

The Federal Reserve has established a Main Street Lending Program (MSLP) to support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic. The MSLP will operate through three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF).

Structure. Under the MSLP, eligible lenders will make loans to eligible borrowers (that is not forgivable), and the Federal Reserve will purchase a 85% or 95% (depending on the facility) participation in each loan from lenders (up to $600 billion in the aggregate). Loans issued under the MSLP would have a four year maturity with interest set at LIBOR +3%, and principal and interest payments on the loans will be deferred for one year.

Eligibility. As detailed further in the term sheets, U.S. businesses established before March 13, 2020 may be eligible for loans if the business either: (1) has 15,000 employees or fewer; or (2) had 2019 revenues of $5 billion or less. (Certain restrictions may apply if a borrower has affiliates or outside investors.) Paycheck Protection Program borrowers are eligible for the MSLP as well.

Status. The Federal Reserve has not yet launched the MSLP and borrowings under the program are not yet available. However, you can contact your bank/lender for details and advice (including about eligibility and application process).

Details. See a summary of and the term sheets for each facility and FAQs providing more information regarding eligibility and conditions.



Business Resources by State

See a list of state, local and private resources available to small businesses. This list will be continuously updated as new programs and information become available.

View Resources



Webinar: Financial Relief Opportunities for Small Businesses

Brookfield Properties and Covington hosted an informational call to help our tenants better understand the federal relief provided for small businesses pursuant to the CARES Act.

This call provides initial, specific information about how to potentially access these loan programs, the criteria for eligibility, and addresses other key questions.

Listen to Webinar Recording



If you have additional questions, please reach out to your Brookfield Properties contact.




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