The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act is landmark legislation designed to help Americans and businesses weather the health and economic crisis caused by the COVID-19 pandemic.
Parts of the CARES Act provide new ways for small businesses to receive financial support from the federal government. Immediately upon passage, the Miami Law Startup Practicum began informing its clients about the new CARES Act programs and both assisting them in evaluating their eligibility and applying for support.
“In times of societal crisis, attorneys have a professional obligation to lean in and help their clients deal with the challenges confronting them,” said Dan Ravicher, Director of the Startup Practicum. “Our students here at Miami Law understand and embrace this responsibility and are working overtime to ensure our clients are kept abreast of all developments regarding federal programs that can help them survive the financial impact of the COVID-19 pandemic.”
In its client advisory, the Startup Practicum students explained the two major portions of the CARES Act that clients could potentially take advantage of.
First, the CARES Act created a new Paycheck Protection Program (PPP), which is available to any small businesses or 501(c)(3) nonprofits with fewer than 500 employees. Eligible entities can borrow up to eight weeks of payroll costs and the loan does not have to be repaid if used for payroll, rent, or utility expenses. Applications are made through the entity’s financial institution.
Second, the CARES Act expanded the already-existing Small Business Administration Economic Injury Disaster Loan Assistance program that is, like PPP, available to any small business or 501(c)(3) nonprofit. Entities can borrow up to $2 million, but while there is no loan forgiveness possible, there is no payment due for the first year and loan terms can be for as long as 20-30 years at extremely low interest rates. Applications are made through the SBA’s website.
The Startup Practicum is available to help its clients navigate these turbulent times and weigh their options. If you have a University of Miami-affiliated business (student or alumni) and you would like to schedule a consultation to discuss how COVID-19 has impacted your business, please complete this prospective client form.