Coronavirus aid and relief act signed, includes provisions for small clinics, businesses
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed earlier this week and includes some provisions that may impact small practices, clinics, and other integrative healthcare businesses.
The $2 trillion stimulus package was created to address the looming economic recession caused by the novel coronavirus (COVID-19). The funds are allocated for businesses, individuals, federal agencies, and state and local governments as follows:
- 30 percent to individuals and families
- 25 percent to big businesses
- 19 percent to small businesses
- 17 percent to state and local governments
- 9 percent to public services
There are several provisions that affect small businesses and practices, including the Paycheck Protection Program, changes to the U.S. Small Business Administration (SBA) Economic Injury Disaster Loans (EIDLs), business tax changes, and changes to the Families First Coronavirus Response Act (FFCRA).
The Paycheck Protection Program is one of the largest sections of the Act, setting aside $350 billion in government-backed loans from private banks that can, in some cases, be covered by grants. Currently, the SBA guarantees small business loans that are given out by a network of lenders. The program creates a type of emergency loan that can be forgiven when used to maintain payroll through June 2020 and expands the network so additional lenders can issue the loans.
Eligible businesses must have been operational on February 15, 2020 and include small businesses with fewer 500 employees, select business types with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(c)(19) veteran organizations. Additionally, self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply.
The maximum loan under the act is $10 million, with a 4 percent or less interest rate. No personal guarantee or collateral is required. Lenders are expected to defer fees, principal, and interest for at least six months and up to one year. Small businesses can get some or all their loans forgiven.
Banks are currently implementing this program, and businesses are encouraged to reach out to their local bank to see if it is available. The U.S. Chamber of Commerce offers additional information.
The CARES Act also expands eligibility for the SBA economic disaster loans. Though the SBA previously extended the loans to all small businesses affected by COVID-19, the CARES Act expands the program even further and makes is easier for businesses to apply. Click here to view apply or learn more.
Small businesses can get both a Paycheck Protection Program loan and an EIDL as long as they don’t pay for the same expenses. Lenders will offer more tailored information for their customers.
The CARES Act also makes some changes to taxes and tax policies for small businesses impacted by COVID-19. These changes include tax credits, tax deductions, and delayed payroll tax payments for self-employed individuals.
Lastly, the Act makes small alterations to the Families First Coronavirus Response Act (FFCRA) regarding paid sick leave and family and medical leave. These changes include updated caps for daily and total paid family and medical leave. The full text for the FFCRA can be found here.
Editor's note: Click here for more information and ongoing COVID-19 updates for integrative healthcare professionals.