CARES Act – Everything You Need to Know

Last week, Congress passed the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act). This 880-page legislation was passed in response to the Coronavirus crisis and has major implications for our economy. More information and details will emerge in the coming days and weeks, but below is a summary of some of the key features of the legislation that are relevant to our members and industries here in North Central Massachusetts:

  • Paycheck Protection Program: This includes $350 billion in funding for loans to small businesses and other entities, including 501 (c) 3 non-profits with zero-fee loans of up to $10 million. Up to 8 weeks of average payroll and other costs will be forgiven if the business retains its employees and their salary levels. Principal and interest is 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 can be used in coordination with other COVID-financing assistance established in the bill or any other existing SBA loan program.
  • Emergency Economic Injury Grants: This includes $10 billion in funding for a provision to provide an advance of $10,000 to small businesses and nonprofits that apply for an SBA economic injury disaster loan (EIDL) within three days of applying for the loan. EIDLs are loans of up to $2 million that carry interest rates up to 3.75 percent for companies and up to 2.75 percent for nonprofits, as well as principal and interest deferment for up to 4 years. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
  • The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. Eligible grant recipients must have been in operation on January 31, 2020. The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses.
  • A business that receives an EIDL between January 31, 2020 and June 30, 2020 as a result of a COVID-19 disaster declaration is eligible to apply for a PPP loan or the business may refinance their EIDL into a PPP loan. In either case, the emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the Paycheck Protection Plan.
  • Support for Impacted Industries, States and Cities: It directs $454 billion to the Treasury Department and Federal Reserve to aid affected industries with secured loans, loan guarantees, and other financial measures.
  • Tax relief to mitigate losses, pay employees, and cover utilities: Impacted businesses may temporarily defer tax liability, access an Employee Retention Tax Credit, delay or eliminate estimated quarterly tax payments and filings deadlines, and carry-back the Net Operating Loss (NOL) Deduction.
  • Support for Hospital and Other Health Care Providers: It directs $100 billion to reimburse eligible health care providers for health care related expenses or lost revenues not otherwise reimbursed that are directly attributable to COVID-19. Eligible providers are defined as public entities, Medicare- or Medicaid-enrolled suppliers and providers, and other for-profit and non-profit entities as specified by the Health and Human Services (HHS) Secretary.
Please consider the Chamber a resource as you navigate this crisis. If you have any questions regarding this legislation or the public sector’s response to COVID-19 at the federal, state, or municipal levels, please do not hesitate to contact the Chamber’s public affairs manager, Christopher McDermott, at or 978.353.7600 ext. 224.