Due to the economic uncertainty and disruption caused by the COVID-19 outbreak, Congress has passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide relief for small businesses that are undergoing extreme challenges. The Act as passed includes relief to small businesses across the country in the form of a $349 billion Paycheck Protection Program for Small Business Administration (SBA) eligible businesses and expands the SBA’s current loan program and eligibility requirements in order for businesses to pay employees and keep them on payroll during the current COVID-19 crisis. In this Briefing, professionals from the Manatt SBA/CARES Act Response Group will discuss the criteria for eligibility under these SBA loans, what is involved in the application process, what the borrowed funds can be used for and provisions which afford forgiveness for all or a portion of the amounts borrowed.

Topics will include:

• Eligibility criteria
• The process for new applicants
• The economic terms for CARES Act SBA loans
• The “500-employee determination”—calculation nuances and implications for borrowers backed by venture capital or private equity
• How the loan proceeds can be used
• Provisions governing loan forgiveness
• Alternative relief measures