Coronavirus Small Businesses Stimulus F.A.Q.: Loans, Grants, Freelancers

See below for the specifics of each program.

What does this do?

The program offers loans of up to $10 million to cover eight weeks of payroll plus some additional expenses, like rent and utilities.

The loan can effectively turn into a grant. Most, and in some cases all, of the loan will be forgiven if a company uses the money to retain workers or hire back positions they had to cut. The S.B.A. has waived many of its usual requirements for these loans and will not require collateral for them.

How does the loan forgiveness work?

Both full and partial forgiveness is available.

Businesses can have their loans forgiven in full if they maintain their full-time equivalent head-count (based on a 40-hour workweek) and wages for eight weeks after the loan is disbursed, the Treasury Department said. The agency said that “not more than 25 percent” of the forgiven amount may be used for nonpayroll costs, like rent.

Forgiveness will be “reduced” for companies that trim their head-count or cut workers’ wages by more than 25 percent, the Treasury said. Also, businesses can only borrow and have forgiven the first $100,000 in payroll for each employee.

If a business uses money from the economic injury disaster loan program to cover payroll, it can try to refinance it through the paycheck protection program and be eligible for forgiveness.

How much can I borrow?

Companies can borrow up to two months of their average monthly payroll costs for the past year, plus an additional 25 percent, up to $10 million. “Payroll costs” include salary, wages, tips, commissions, paid leave benefits, employer-paid health insurance premiums and state and local payroll taxes.

What if I already laid off my workers?

You can still have your loan forgiven if you hire them back before the loan money hits your account.

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