COVID-19 Tax and Business Update

Welcome to the first in a series of Covid-19 tax and business updates.

As a part of the legislation passed last week (CARES Act on March 27, 2020), the Small Business Administration (SBA), through your local bank, will be making loans up to $349 billion to small businesses, and some or all of those loans may be forgivable.  

The amount of the loan is based upon your 2019 monthly average payroll costs multiplied by 2.5, and the loan may be used for payroll and certain overhead like rent, mortgage and utilities.  

The loan forgiveness is based upon 1) dollars spent in the next 8 weeks on payroll retained, compared with prior period base, and 2) full time equivalent employees retained (or re-hired) for the 8 week period beginning with loan origination.  Warning:  cuts in payroll dollars or full-time equivalents will reduce the forgiveness amount.

Any portion not forgiven, has a 2 year term and an interest rate of 1.0%.

Let us know, and we are happy to share with you our spreadsheet to help you:

  1. Estimate the amount of loan available, and

  2. Calculate the levels of employment required to obtain partial or complete forgiveness.


The issues are important.  And it is important that you act quickly because the SBA expects there to be an unprecedented number of applications - possibly exceeding the allocated $349 billion.

Treasury has announced that the application process for businesses will begin Friday April 3, followed by independent contractors and self-employed applications the following Friday April 10.

We understand that not all banks will participate in this loan program.  Those banks that do, will most likely cater to their customers first.  Please call your bank, and ask if they are participating in the SBA 7(a) Paycheck Protection Program, and submit an application.  If your bank is not participating, please let us know, we have made arrangements with other banks.

We are here to help you with your application, the computation of payroll and other financial information, and develop models around loan forgiveness.  

  • The sample SBA application form may be found here.

  • PPP program overview may be found here.


You should also know that there are other SBA loan programs available to you.  These programs may be attractive should you not seek loan forgiveness, as they generally have longer terms.

This is a very fluid situation.  Rules change daily.  

In the days ahead, we will continue to keep you informed about changes that directly impact your business and personal affairs.  The next update will include provisions of the CARES act.



(As of April 2 ,2020….updates and guidance are issued daily. The information above may have changed. Contact us if you have questions.)

Steve Moss