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Whitepaper: Paycheck Protection Program Under the CARES Act


On March 27, the President of the United States signed the $2 trillion stimulus bill, the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act (the Act), previously passed by the House and Senate. The Act helps individuals, businesses, healthcare providers, nonprofits, and state and local governments with economic and other relief needed from the effects of the COVID-19 pandemic, including expenses such as payroll and operating costs. 

MMM’s COVID-19 Task Force analyzed the CARES Act with a focus on Title I (Keeping American Workers Paid and Employed Act) relating to the Small Business Administration (SBA) 7(a) Loan Program. Below are several opportunities identified in the Act for financial relief for businesses.  

Key Benefits:

  • Designates $350 billion to provide loans through a new Paycheck Protection Program (PPP) for small businesses with 500 or fewer employees.
  • Loans can equal up to 250% of an employer’s average monthly payroll, up to $10 million.
  • The program would be retroactive to February 15, 2020, to help bring workers who may have already been laid off back onto payrolls.
  • Covered payroll costs include:
    • Salary, wages, and payment of cash tips (up to an annual rate of pay of $100,000)
    • Employee group health care benefits, including insurance premiums
    • Retirement contributions
    • Covered leave
  • For employers who maintain payroll during the covered period, the portion of the loan used for covered payroll costs, interest on mortgage obligations, rent, and utilities may be forgiven.
  • The maximum loan amount for SBA Express loans would be increased from $350,000 to $1 million.
  • The covered period for the loans is February 15 through June 30.

For more detailed guidance on how the CARES Act and SBA loan program can help your business, download our whitepaper, Paycheck Protection Program Under the CARES Act. Please reach out to the COVID-19 Task Force or your MMM attorney with any questions.

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