On March 27th, the Congress passed the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) to increase the Small Business Administration’s 7(a) loan amount maximum to $10 million and expand what these funds can be used for.

This program is available to companies and nonprofits with less than 500 employees, as well as self-employed individuals that were in operation prior to February 15, 2020. Applicants will be required to sign a good faith certification that their business or nonprofit has been affected by COVID-19 and that funds will be used to retain employees and existing debt obligations. The loans have no borrower or lender fees associated with them and are guaranteed 100% by the government and not by the company or individual.

The borrower is required to use the money on payroll costs, debt obligations, rent and utilities. The greatest benefit to the borrowers is that if the funds are used for these purposes and other qualifications are met, the borrower is eligible for up to 100% loan forgiveness. Debt forgiveness is typically considered taxable income to the business or business owner, however, under this law the forgiveness is completely tax free.

In order for the loan to be completely forgiven employers must use the funds for the purposes previously listed during the first 8-week period after the loan origination. They must also maintain the same level of full time employees (FTEs) during this period that the company had on average during portions of the previous year. Should this percentage of FTEs decrease, the amount of the loan forgiven decreases proportionally.

The Small Business Administration website has been updated to provide you with information to start the loan application process.  The programs as of now are first come first serve with a set amount of funds available.  We urge to you to begin the process by doing the following:

  1. Find a local SBA banker/lender at http://www.sba.gov/LenderMatch
  2. Access the SBA loan application site at


  1. Your completed application can be uploaded directly on this site
  2. If you need immediate cash to bridge payroll, inventory or other overhead expenses, you should apply for an Express Disaster Bridge Loan. The Terms of this loan are:
    1. Up to $25,000 available while waiting on a decision on additional loans
    2. A fast turnaround to get funds at work immediately
    3. The Express Loan can be repaid in full or in part by subsequent proceeds from an Express Economic Injury Disaster Loan


We urge you to visit the www.SBA.gov website for specific information to submit your application.

We will also be updating our website (www.skbcpas.com) with information on other aspects of the new tax legislations as it applies to small businesses and individuals.  Please click on the “Blog” heading at the top right of our home page