Small Business Provisions in Coronavirus Aid, Relief, and Economic Security (CARES) Act – Paycheck Protection Program Information


Congress has reached a bipartisan compromise on a $2 trillion economic stimulus package to address the economic impact caused by the COVID-19 outbreak titled the Coronavirus Aid, Relief, and Economic Security (CARES) Act. There is a lot to go through, but business owners are making decisions today and Acumen wants to make sure you have the information you need to make sure you are informed.

We’ve provided links to brochures from third parties on our website we find to be particularly helpful with regard to one item we have received the most questions concerning. It relates to the stimulus including nearly $350 billion in funding for a provision to create a Paycheck Protection Program (PPP) providing small businesses, certain non-profits and other entities with loans of up to $10 million. Small businesses (companies with 500 or fewer employees) can apply for the loan through banks making the loans on behalf of the Small Business Administration. Up to eight weeks of average payroll (as defined below) and other costs (including qualifying mortgage interest, business rent and utilities) may be forgiven if the business retains its employees and their salary levels. It is important to note you must apply and qualify for this forgiveness. One risk we see is there may not be enough funds set aside for forgiveness at the current level or the SBA may deny the forgiveness for some other reason.  Principal and interest are deferred for up to a year and all borrower fees are waived. This temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury is designed as a complement to other COVID-19 related financing assistance established in the bill as well as existing SBA loan programs.

Features of the loan program include:

  1. Businesses must apply for the loan by June 30.
  2. Waiver of affiliation rules for businesses in the accommodation and food service industries, franchises and businesses receiving financial assistance under the Small Business Investment Act.
  3. Nonrecourse – SBA has no recourse against any business owner and there are no personal guarantees.
  4. Interest not to exceed 4%.
  5. No debt service payments for at least six months and not more than one year.

Payroll costs include employee compensation that is:

  1. Salary, wage, commission, or similar compensation;
  2. Payment of cash tip or equivalent;
  3. Payment for vacation, parental, family, medical, or sick leave;
  4. Allowance for dismissal or separation;
  5. Payment required for the provisions of group health care benefits, including insurance premiums;
  6. Payment of any retirement benefit; or
  7. Payment of state or local tax assessed on the compensation of employees.

Borrowers must certify in good faith that (i) current economic conditions make the loan necessary to support ongoing operations, (ii) funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments, (iii) no other pending applications are duplicative of the covered loan request, and (iv) the recipient has not received amounts for the same purpose or duplicative amounts from February 15, 2020, through December 31, 2020.

Acumen is receiving volumes of information and we are attempting to condense it to what is most important for you. If you have any questions, we are here to help. This is evolving and we continue to do research to help you during these challenging times.

If you would like more information about this program and to learn more about how Acumen can help you invest intentionally, please contact us.


Reese Veltenaar

About the Author: Reese Veltenaar is the Managing Partner and Wealth Strategist for Acumen Wealth Advisors in Chattanooga, TN.  Reese holds a Bachelor of Science in Finance with a Minor in Economics from the University of Florida, a Master of Science in Accounting from the University of Tennessee at Chattanooga, is a Certified Financial Planner (CFP®) and a Certified Trust and Financial Advisor (CTFA).  Reese is a 2019 and 2020 Gator100 honoree with Acumen Wealth Advisors recognized as one of the fastest-growing Gator-led companies in the world.  He is also recognized in InvestmentNews’ 2017 40 Under 40 class for his accomplishments, contributions, leadership, and promise in the financial planning industry throughout the United States.


This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. All information is current as of the date of herein and is subject to change without notice. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.  

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