COVID-19 CARES Act: Critical Updates & Lessons Learned

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As Americans continue to respond to the COVID-19 pandemic and its impact on businesses and individuals nationwide, the economic relief provided in the form of the CARES ACT, has become increasingly challenging to navigate due to frequent updates.

Here are some tips to help avoid some of the loan application pitfalls, as well as useful information to guide you to the loan program that fits you best:

Paycheck Protection Program (PPP)

Update: As of April 16, 2020: “The SBA is currently unable to accept new applications for the Paycheck Protection Program (PPP) based on available appropriations.”

As of April 20, 2020: Lawmakers on Capitol Hill are expected to approve an additional $300 Billion for the PPP program.

  • The SBA is continuing to process applications that have been submitted but not funded, on a first-come, first-serve basis.
  • Businesses that participate in this program and receive funding will be eligible for forgiveness. This requires an application to the lender that funded the loan, showing:
    • A) Documentation of payroll data for all employees covered
    • B) Documentation of payments made to cover mortgage and lease obligations as well as utilities
    • C) Certification by a representative of the business that the documentation was true, and funds were used according to the guidelines

Lessons Learned:

  1. Banks are also requiring additional documents such as:
    • Corporate documents- Articles of Incorporation, Certificates of Formation, and any other Governing documents
    • 2019 IRS Form 941s and 944(if the business has employees)
    • 1099-MISC if the applicant is an Independent Contractor
    • 2019 IRS Form1040, Schedule C and 1099-Misc if the applicant is self-employed
  2. If the company has an existing SBA loan with the bank, they do not have to go through the entire application process but only provide payroll data.
  3. Setting up a conference call with the bank that will be processing the loan, reviewing the completed information and asking final questions, before the opening day of the application process, can be a game-changer when it comes to timing.
  4. Staying informed of changes daily by visiting the SBA and IRS sites so that last-minute updates do not create a delay in the application submission (this was especially critical at the onset of the program).

Helpful Tips:

  • Separate Bank Account: We suggest that businesses open a separate bank account to deposit the funds from the PPP loan. This approach allows for a clean audit trail for when forgiveness is applied for. The traceability of funds will be critical during this audit, and separating the loan disbursements from a standalone account can make the audit process seamless. Also, if the bank issuing the PPP loan requires that the applicant is a customer, opening this separate account with the bank that lends you the money is a good option.
  • Early Bird Gets the Worm: As we wait for the new round of funding to be approved, have all of your documents ready, find a lender, and stay in contact with them daily. And, if they offer an online application secure access to it. As soon as the application process is opened, hit “SUBMIT”!


Update: As of April 16, 2020: “SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.”

  • The SBA is continuing to process applications that have been submitted but not funded, on a first-come, first-serve basis.
  • If a small business, with an existing relationship with an SBA Express Lender, has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan, up to $25,000. The amount will be repaid in full or in part from the EIDL loan.


Unlike the PPP, which is a forgivable loan, if you can prove that you have retained your employees for which you needed the loan to pay, the Employee Retention Credit (ERTC) is a fully refundable payroll tax credit. Both programs provide free money, but a business can only apply for one of the programs, assuming they qualify for both. Therefore, you must analyze the financial implication of each relief program before deciding which to choose.

The ERTC does not set a limit to the number of employees a business has. However, in order to be eligible, the organization would have to prove a significant decline in gross receipts beginning with the first quarter in which an employer’s gross receipts in 2020 are less than 50 percent of its gross receipts for the same calendar quarter in 2019. The credit is equal to 50% of qualified wages paid to an employee between March 12, 2020 and January 1, 2021, including qualified health plan expenses. The maximum amount of qualified wages that can be claimed is $10,000, which means the maximum credit for any one employee is $5,000.

Generally, the PPP Loan provides greater financial relief than the ERTC for companies under 500 employees, but if the PPP funds are not available, the ERTC is also available to assist.


The CARES Act can offer many opportunities for relief in the form of loans for small businesses, sole proprietors, and individuals. Acting now can make an impact on securing your company’s long-term survival and success. For all the latest updates and clarifications made to the CARES Act, please refer to


We know this is a challenging time and things are changing fast. If you need any guidance on the new loan process, we can help you navigate the many ways the CARES Act can ensure your business continues to thrive during the COVID-19 pandemic. Our team of consultants is ready to support you with our advisory services, please get in touch. Learn more about our full suite of services here.