The CARES Act is an important piece of legislation for businesses, as it provides a range of benefits to help them weather the economic storm caused by the COVID-19 pandemic. The Act increases eligibility for certain small businesses and organizations, allowing them to receive loans granted under section 7 (a) of the Small Business Act (15 U. S. C.).
It also provides a maximum loan amount and fee exemption for type 7 (a) loans, as well as considerations for evaluating a borrower's eligibility. Additionally, the CARES Act provides grants to resource partners to provide education, training and advice to covered small businesses, and establishes goals and metrics for the funds available. The CARES Act increases eligibility for certain small businesses and organizations, allowing them to receive loans granted under section 7 (a) of the Small Business Act (15 U. This includes private non-profit organizations and public non-profit organizations that employ no more than 500 employees.
Non-profit entities that qualify for payment for items or services provided under a state plan under Title XIX of the Social Security Act (42 U. C.) are excluded from this provision. The maximum loan amount during the period covered is determined by the beneficiary of a loan granted under section 7 (a) of the Small Business Act (15 U. When evaluating a borrower's eligibility to apply for a loan under section 7 (a) of the Small Business Act (15 U.
C.), lenders must consider factors such as the borrower's creditworthiness, ability to repay the loan, and other relevant factors. The CARES Act also provides fee exemption for type 7 (a) loans during the period covered, with respect to each loan secured under section 7 (a) of the Small Business Act (15 U. Additionally, no later than 30 days after the date of enactment of this Act, the Administrator will provide guidance to lenders under section 7 (a) of the Small Business Act (15 U. C.) regarding commitments for 7 (a) loans. The CARES Act also provides grants to resource partners to provide education, training and advice to covered small businesses. The Administration can grant 80 percent of the funds authorized to carry out this subsection to small business development centers, which will be granted in accordance with a formula developed, negotiated and agreed jointly, with the full participation of both parties, between the association formed under section 21 (a) (A) of the Small Business Act (15 U.
The Administration will grant 20 percent of the funds authorized to carry out this subsection to business centers for women. The goals and metrics of the funds available in this subsection will be developed, negotiated and agreed jointly, with the full participation of both parties, between the resource partners and the Administrator. The Administrator shall make publicly available the methodology by which the Administrator and resource partners jointly develop these metrics and objectives. The eligible beneficiary will be entitled to debt forgiveness for a covered 7 (a) loan in an amount equal to the cost of maintaining payroll continuity during the covered period. Amounts that have been forgiven under this section will be considered debts canceled by authorized lenders under section 7 (a) of the Small Business Act (15), S, C., and will be treated as a default in accordance with procedures that would otherwise apply to default on a secured loan under section 7 (a) of the Small Business Act (15 U. The amount of loan forgiveness under this section shall not exceed the sum of costs associated with payroll reduction based on reduction in number of employees.
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