Partner Casey Fleming was quoted in the BizTimes article, “Financial Institutions Await Guidance for Federal Relief Programs,” about important considerations for businesses wanting financial relief available under the CARES Act. While the back-end processes of the economic relief programs are still being worked out, it’s important for businesses to weight their options.
Loan forgiveness is a critical component for businesses experiencing economic hardship. Under the PPP, an employer could have his or her loan forgiven entirely if the funds are spent properly. On the other hand, loan forgiveness available through EIDL will be no more than $10,000.
The Paycheck Protection Program, for example, is designed to incentivize small businesses who are able to maintain employees and wages despite the pressure from a slowed economy. However, if a business already let go some employees, they still could be eligible for the PPP.
As long as a business can show it had employees as of Feb. 15, 2020, once approved for the loan, those funds can be used to rehire staff. Loan forgiveness will also apply so long as any employees let go are rehired by June 30.
“From a strategic perspective, whether it’s a reduction in force or salary reduction, that’s something that our clients are taking into consideration,” Fleming said.
