Get Answers to Frequently
Asked Questions about COVID-19




What is the CARES Act?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is intended to address the economic fallout of the 2020 Coronavirus (COVID-19) pandemic in the United States. 

The bill has a provision titled the Paycheck Protection Program (PPP); the first round of economic relief included a $349 billion loan program that provided assistance to small businesses (500 and fewer employees) experiencing financial duress due to the shutdown measures in place to fight the spread of the COVID-19 pandemic. The first round of funding ran out on April 16, 2020.

On April 23, 2020, the House of Representatives approved a bill to replenish the program with a $484 billion package to further help small businesses, as well as expand funding for hospitals and COVID-19 testing, adding an additional $310 billion directly into the PPP.

For more details on the program, please read a summary from the U.S. Treasury issued April 7, 2020. 


How much of the second round of economic relief ($480 billion) is allocated to small businesses?

Of the $310 billion authorized for the PPP to support small businesses hurt by the Coronavirus outbreak, $60 billion will be set aside for Economic Injury Disaster Loans (EIDL), a parallel program operated by the Small Business Administration (SBA).


What is the difference between an EIDL and PPP loan?

PPP loans provide small business loans equal to 2.5 times their average monthly payroll, up to $10 million, that require repayment unless granted forgiveness. Whereas, EIDLs offer financial advances up to $10,000 that do not need to be repaid.


Is my company eligible for financial relief?

As deemed by the SBA, all businesses – including nonprofits, associations, veteran organizations, independent contractors, and self-employed individuals – with 500 or fewer employees on the payroll are eligible. Notably, all loan terms will be the same for everyone.


Are multi-unit franchisees eligible?

Yes, any business with less than 500 employees per physical location should qualify for a PPP or EIDL.

Normally SBA Rules would bar multi-unit franchisees from being considered a small business, however, the CARES Act amended this Rule to exempt “any business concern operating as a franchise that is assigned a franchise identifier code by the SBA.”

For businesses that manage franchises, each franchisee that is a separate legal entity is eligible.


How much money can my company receive?

The maximum loan will be equal to 2.5 times the average monthly payroll costs for the previous calendar year, up to $10 million. The loan is meant to cover eight weeks of payroll plus essential expenses, such as rent or mortgage interest and utilities. 

The loan can, and in most cases will, turn into a grant; the loan will be forgiven if you use the money to retain workers or hire positions that were cut due to COVID-19.
The program generally uses February 15, 2020 for calculating pre-pandemic payroll. The date for seasonal businesses differs; depending on your business’ situation, the loan size and payroll cutoff date will be calculated in different ways. Reference the Small Business & Entrepreneurship guide for more information.

How do I calculate how much financial aid my company will receive?

Forbes lays out the process in five clean steps: 

  • Aggregate payroll costs from the last 12 months for employees whose principal place of residence is the United States;
  • Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year;
  • Calculate average monthly payroll costs (divide the amount from Step 2 by 12);
  • Multiply the average monthly payroll costs from Step 3 by 2.5;
  • Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, deduct the amount of any “advance” under the EIDL COVID-19 loan because it does not have to be repaid.


How does loan forgiveness work?

Loan forgiveness is the cancellation of your loan—meaning, you are no longer required to repay the loan.

With regard to the PPP, you can receive either full or partial forgiveness based on whether you maintain or quickly rehire employees and maintain salary levels for eight weeks after the loan is distributed. It’s important to note that no more than 25 percent of the forgiven amount may be used for nonpayroll costs, such as rent or utilities.  

Full: If the funds are used for payroll costs, rent, utilities, at least 75 percent of the forgiven amount must have been used for payroll. Your loan payments will also be deferred for six months.

Partial: Forgiveness will be reduced if full-time headcount declines, or if salaries or hourly wages decrease.


How do I apply for a loan?

The application deadline is June 30, 2020


Is it possible for the second round of economic relief to run out?

Yes, and possibly soon. Funding is limited and is available at first come, first served basis.


Am I still eligible if I laid off my workers already? 
The pre-pandemic payroll cutoff date is February 15, 2020. As long as you bring back any workers laid off after that date, you’ll be considered eligible for a loan and full forgiveness.
The date for seasonal businesses differs. See above for more information.


What is the Employer Payroll Tax Deferral?

The deferral program allows employers and self-employed individuals to defer payment during the remainder of the 2020 calendar year.

The amount of the tax is generally 6.2 percent of an employee’s wages. Any deferred tax would be paid over the following two-year period, with 50 percent due by December 2020, the other 50 percent due by December 2021.


What unemployment benefits are available through the Act?

If you lose your job due to Coronavirus, you are eligible for an extra $600 weekly benefit for the weeks of unemployment between April 5, 2020 and July 31, 2020, in addition to the amount you’re entitled to receive under state law.

Eligibility includes, but is not limited to:

  • Have been diagnosed with COVID-19
  • Experience symptoms of COVID-19
  • Unable to get to work due to the quarantine
  • Are caring for a student or family member due to COVID-19


What manufacturing businesses are deemed essential? And will this list change?
Depending on the industry, most state and local regulators have deemed advanced manufacturing as essential infrastructure. Refer to CISA’s Advisory Memorandum for a complete guideline of essential critical infrastructure workers.


Resource Center

Congress’ CARES Act

 Federal Guidelines/Applications

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