March 31st, 2020

How to Access the PPP Loan Application and other CARES Act Relief for Small Businesses and Nonprofits

Two trillion dollars and 880 pages later, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted on Friday, March 27. Now what? Individuals and businesses across the country are trying to figure out what it means for them and what to do next. Here is some guidance on how the CARES Act helps small businesses and nonprofits via financing, grants, tax credits and deferrals, most notably, the SBA Paycheck Protection Program (PPP) loan.

CARES Act Financing for Small Business and Nonprofits

Perhaps the most talked about loan thus far, available to both small businesses and nonprofits, is the Small Business Association’s Paycheck Protection Program (PPP) loan. The PPP loan is meant to help businesses retain their employees and cover up to 250 percent of a business’ average monthly payroll expenses, with a portion eligible for forgiveness.  The SBA has 30 days to provide regulations and SBA lenders will process those loans. Apply for the SBA PPP loan here.

To help cover expenses that could have been met had the pandemic not occurred, including payroll and other operating expenses, consider the Economic Injury Disaster Loan (EIDL). Apply for up to $2 million, repayment which can be deferred up to four years and rolled into a PPP loan, here.

If you were not able to secure sufficient funding from the aforementioned loans, the Coronavirus Economic Stabilization Act of 2020 Loan may be an option. Borrowers must, until September 30, 2020, maintain their employment levels as of March 24, 2020, to the extent practicable, and retain no less than 90 percent of employees as of that date.

For small businesses with up to 100 employees, the Pennsylvania Industrial Development Authority (PIDA) COVID-19 Working Capital Access Program may be a fit. Maximum loan amounts are up to $100,000. See if you are eligible and apply here.

For nonprofits, the Unemployment Relief for Governmental Entities and Nonprofit Organizations pays half of unemployment costs incurred March 13 – December 31, 2020.

CARES Act Grants for Small Business and Nonprofits

For small businesses and nonprofits who also applied for an EIDL loan due to COVID-19, the Emergency Economic Injury Disaster Grant may be an option. The grant can be up to $10,000 and does not need to be repaid, even if the EIDL loan is denied. This grant, however, will reduce the amount that can be forgiven under the PPP loan.  It may be used for paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses.

Local to the Lehigh Valley, Greater Lehigh Valley Chamber of Commerce Grant Fund is offering loans up to $2,000 for qualifying businesses and nonprofits. This grant can be used for rent, payroll and other operating expenses. Apply here by April 3.

CARES Act Tax Credits for Small Business and Nonprofits

The Employee Retention Credit is for certain employers whose (1) operations were fully or partially suspended, due to a COVID-19-related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year. This refundable payroll tax credit covers 50 percent of qualified wages paid by employers to employees on the first $10,000 of compensation paid, including employer-paid health benefits, between March 13, 2020 and December 31, 2020. This credit is not available for those who receive a PPP loan.

CARES Act Deferrals for Small Business and Nonprofits

The Employer Payroll Tax Deferral covers the employer share of Social Security tax (6.2% on wages). The deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.  This deferral option is not available for those who receive a PPP loan.

Additionally, borrowers who have existing 7(a) or 504 business loans with the SBA also have deferral options. Regarding 7(a) loans, lenders may grant a deferment up to six months for loans not sold on the secondary market; lenders may grant a one-time unilateral deferment of up to 90 days without requiring prior investor consent for loans sold on the secondary market. Regarding 504 business loans, the amount deferred should not exceed six (6) cumulative monthly payments or 20% of the original loan amount, whichever is less.

PA House Bill 68 was also passed by the House and Senate and waives the one-week week waiting requirement and job search/registration requirements for all claimants for the duration of the disaster emergency. In addition, it provides relief from charges for employers who pay a solvency fee to the UC Trust Fund and provides for deferred repayment terms for non-contributing employers.

This blog was prepared based upon preliminary review of the CARES Act and other COVID-19-related legislation as of March 31, 2020. It will be updated regularly.


Attorney Loren Speziale collaborates with business owners and human resource professionals, providing legal guidance for a wide variety of operational and personnel matters. 

The content found in this resource is for informational reference use only and is not considered legal advice. Laws at all levels of government change frequently and the information found here may be or become outdated. It is recommended to consult your attorney for the most up-to-date information regarding current laws and legal matters.