CARES Act Benefits Explained: Key Provisions for Businesses and Nonprofit Organizations
The newly enacted Coronavirus Aid, Relief, and Economic Security Act (commonly known as the “CARES Act”) offers a wide range of benefits and incentives to help businesses weather the economic downturn caused by COVID-19. This alert covers five of the key programs offered to businesses and nonprofit organizations: the Paycheck Protection Program, the U.S. Treasury’s Direct Lending Program, Economic Injury Disaster Loans, tax relief, and enhanced deductibility benefits for charitable giving.
Late on April 2, 2020, the Small Business Administration (the “SBA”) issued an interim final rule (the “Interim Final Rule”) that provides additional guidance for implementation of the Paycheck Protection Program and requirements for loan forgiveness, some of which will require further consideration as additional guidance is released. The Interim Final Rule becomes effective on the date it is published in the Federal Register.
We caution that the Government has issued contradictory and/or imprecise guidance concerning the CARES Act, and new guidance may continue to be issued. Furthermore, the CARES Act itself lacks clarity and precision in some respects. It will be important for all persons attempting to avail themselves of benefits under the CARES Act to remain abreast of new developments and interpretations of these complex rules and to obtain professional advice with regard to the specific facts of each situation, based on the rules as they may evolve. This alert is dated April 3, 2020, its release date, and should be referenced with this caveat in mind.
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