Social distancing measures and statewide stay-home orders means consumers are staying home and nonessential businesses are being forced to temporarily close. Home furnishings stores and interior design businesses are not considered essential services, so the closure of these operations have the potential to have negative financial consequences for many small businesses. The newly passed CARES Act offers a number of opportunities to help keep businesses afloat during the coronavirus pandemic.
What is the CARES Act?
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed on March 27, 2020, is a $2 trillion stimulus package designed to provide economic relief to individuals and businesses affected by the coronavirus pandemic.
According to NPR, $377 billion of the $2 trillion allocated to the CARES Act will go to small businesses with 500 or fewer employees.
What benefits does the CARES Act offer small business owners?
The CARES Act provides $10 billion for Emergency Economic Injury Grants of up to $10,000 to provide emergency funds for small businesses to cover immediate operating costs.
Additionally, through the Small Business Debt Relief Program, $17 billion is available for six months of payments to businesses with current non-disaster Small Business Administration loans.
The Paycheck Protection Program provides small businesses with loans to pay up to eight weeks of payroll costs, including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. The eight-week period of these loans will be fully forgiven if the employer maintains or quickly rehires employees and maintains compensation levels. Forgiveness will be reduced if the number of full-time employees declines, or if compensation decreases.
What benefits does the CARES Act offer employees?
Unemployment insurance has been expanded to 39 weeks from 26, and the bill provides an additional $600 payment on top of the weekly benefit amount an eligible employee would otherwise receive. Americans will also receive one-time stimulus checks of up to $1,200 per adult and $500 per child.
How can small businesses apply for the CARES Act benefits?
Business owners can apply for the Paycheck Prevention Program effective April 3, through an existing Small Business Administration 7(a) lender or through any participating or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution.
The Small Business Administration’s website has a portal with applications for all loans and grants associated with the CARES Act.
Additional resources
- National Retail Federation: Coronavirus Resources for Retailers
- International Market Centers: Coronavirus (COVID-19): Small Business Guidance & Loan Resources
- U.S. Senate Committee on Small Business & Entrepreneurship: The Small Business Owner’s Guide to the CARES Act
- U.S. Department of the Treasury: Assistance for Small Businesses
