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CARES Act – Entrepreneurial Development and Education

The House passed the Senate’s CARES Act yesterday. The Act includes a section related to entrepreneurial development that provides funding to educate small businesses and their employees on resources available during this time:

MINORITY BUSINESS DEVELOPMENT AGENCY

  • The MBDA will give out grants to be used for education and training their employees on:
    • Accessing and applying for Federal business resources
    • The hazards and prevention of COVID-19
    • The potential effects of COVID-19 on supply chains and sales
    • How to reduce the spread of COVID-19 with Video calls
    • No matching funds will be required for these grants
    • The agency can also wave any matching requirement previously made

UNITED STATES TREASURY PROGRAM MANAGEMENT AUTHORITY

  • The Department of Treasury will extent lending to participate in the paycheck protection program to provide loans for insured depository institutions, insured credit unions, institutions of the Farm Credit System chartered under the Farm Credit Act of 1971 and other lenders that do not already participate in lending
  • Until the president has deemed the National Emergency over
  • They will follow the same rules and regulations as normal paycheck protection program loans

EMERGENCY EIDL GRANTS

  • All firms, proprietorships, independent contractors with less than 500 employees are eligible as well as private nonprofits
  • With respect to the 7(b)2 small business loans, Administrator shall waive…
    • Rules related to the personal guarantee on advances and loans of not more than $200,000
    • The requirement that an applicant be unable to obtain credit elsewhere
    • Specifically, With respect to dollar loans,
      • Applicants may be approved solely on credit score, not requiring tax returns
      • Applicant may seek an advance within three days after the administrator receives an application, less than $10,000
      • Must be used on providing paid sick leave, maintaining payroll, meeting increased costs, making rent and repaying obligations that cannot be met due to revenue loss
      • The advance does not need to pay back the advance

RESOURCES AND SERVICES IN LANGUAGES OTHER THAN ENGLISH

  • Must be made available in the ten most commonly spoken languages in the US

SUBSIDY FOR CERTAIN LOAN REPAYMENTS

  • For small business covered loans, the administrator will pay the principal, interest and any fees that are owed on a covered loan if taken out in the past six months or currently
    • Payments will begin being made by the administrator no later than 30 days after the date on which the first payment is due
    • Payment by the administrator will be applied so that the borrower is relieved of the obligation to pay that amount
    • The administrator will waive statutory limits on maximum loan maturities for any covered loan durations where the lender provides a deferral and extends the maturity
      • These provisions will last until the end of the calendar year
March 31, 2020