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On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted. Included in the CARES Act is a provision for $349 billion for small businesses through federally backed loans under the Paycheck Protection Program, a modified and expanded Small Business Administration (SBA) 7(a) loan guaranty program. Congress designed the program to make funds available quickly to qualifying businesses through approved banks and nonbank lenders.

Under the CARES Act, qualifying businesses include:

  • Businesses that have up to five hundred employees or meet the applicable size standard for the industry, as provided by SBA’s existing regulations
  • Businesses in the accommodation and food services industries with more than one physical location but no more than five hundred employees at each location
  • Nonprofit organizations
  • Eligible independent contractors and sole proprietors

Provision considerations

  • Loans will be available through SBA and Treasury–approved banks, credit unions, and some nonbank lenders.
  • Borrowers can borrower 2.5 times their monthly payroll expenses, up to $10 million.
  • Applicable uses for the loan proceeds include: qualified payroll costs; rent; utilities; and interest on mortgage and other debt obligations.
  • Loan forgiveness is available for funds used to pay eight weeks of payroll and other qualified expenses.

Which businesses qualify for the Paycheck Protection Program?

According to the language of the bill, eligible businesses include those in operation on February 15, 2020, that have no more than 500 employees or that meet the applicable size standard for the industry as provided by SBA’s existing regulations.1

Coronavirus (COVID-19): Small Business Guidance & Loan Resources

The SBA’s Procurement Center Representatives can assist affected small businesses to engage with their contracting officer. Use the Procurement Center Representative Directory to connect with the representative nearest you.


1  For the purposes of determining the number of employees, the term “employee” includes individuals employed on a full-time, part-time, or other basis.