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Breaking down the CARES Act Paycheck Protection Program

What's inside the CARES Act and what it means for your business

Bill Airy //April 13, 2020//

Breaking down the CARES Act Paycheck Protection Program

What's inside the CARES Act and what it means for your business

Bill Airy //April 13, 2020//

As many business owners know, on March 27, Congress approved The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes approximately $2 trillion in assistance to help individuals and businesses regain financial stability and significant expansion of Small Business Administration (SBA) lending under the Paycheck Protection Program (PPP).

The Paycheck Protection Program includes 100% federally guaranteed loans to small businesses but has many local business owners scratching their heads about eligibility, what’s required, who can help them get financed and more.

Let’s break it down.

Who Can Apply?

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), 501(c)(3) non-profit organizations, 501(c)(19) veterans organizations, or Tribal businesses (see sec. 31(b)(2)(C) of the Small Business Act) affected by coronavirus/COVID-19.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.

Loan Details and Forgiveness

Loans can be up to 2.5-times the borrower’s average monthly payroll costs.

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%. The Paycheck Protection Program will be available through June 30, 2020.

How Businesses Can Apply

Business owners can apply for the program through a variety of lending sources, including lending agents such as Lendio Denver, banks and other SBA 7(a) lenders.

What You May Need to Apply

  • General business information, including tax ID number, number of employees, type of business and year business was established
  • Average monthly payroll
  • Tax returns
  • Payroll history

“Whether you work with your local banker or another lending source, know your options and have your financials in order,” says Ed Francis, the CEO of InBank. “We are working directly with our customers to help them navigate and apply for the available loan programs to help them through this period of financial stress. The overall goal of all lenders at the moment is to help business owners keep their employees on the payroll, pay rent, mortgage interest and utilities to weather the COVID-19 challenges.”

A new poll from MetLife and the U.S. Chamber of Commerce found 43% of small businesses say they are three to six months away from permanently shutting down. While these statistics are staggering, the Paycheck Protection Program and other options are critical to helping businesses through the current economic downturn.

For business owners in Colorado that are experiencing or expect to experience cash flow challenges, contacting a lender is critical first step. Be prepared with your company’s financials to expedite the loan process. The Paycheck Protection Program is just one of several stimulus programs available to small business owners.

For information on additional lending options, visit


Bill and Leanne Airy are owners of Lendio Denver, offering lending solutions to small business owners. Bill is a Colorado native and experienced entrepreneur who founded his first small business in 2007 and sold several businesses before founding Lendio Denver. Contact him at 303-525-3323 or [email protected]