Last Updated: July 25, 2020

Latest Update CARES Act Phase 3.5 (read at Troutman Sanders)


Access the latest version of Fridman Law Firm's PowerPoint Presentation on the CARES Act  here:




We are Here to Help

If you are a small business or startup company and are experiencing challenges because of COVID-19, please reach out to us. We can help guide you in the right direction and are here as a resource to you and your business. You can set up free consultation with one of our attorneys by calling (212) 262-9823 or by sending an e-mail to We are also able to assist you with SBA loan documentation applications and NYC resources applications.


Small businesses and startup entrepreneurs are as important to the economy in the United States as large companies. When the Government announced the “shelter in place” order for all residents to fight against the rapid spread of novel coronavirus across the country, small businesses and startup entrepreneurs faced an immediate “demand shock”. While startups and early stage companies are financially more fragile and cash-strapped when market demand dramatically decreases, founders and entrepreneurs are seeing the coronavirus as a major threat to their business. Almost all small business owners are taking some sort of action adjusting to their changing economic condition or to protect themselves from potential disruption. Many owners have already sought out financial help and more are planning to do so in the near future as local, state, and federal governments unveil new plans to tackle the challenges that small businesses or startups with little runway face.

In response to this economic downturn, the federal government has passed phase three of its $2 trillion stimulus package, known as the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, more funding options are available to small businesses across the country. The list of these options includes state and private resources such as loans, grants, and payroll tax relief. 


Information from the Treasury Department and Senate with info on SBA loans and the CARES Act that might be useful:


The Small Business Owner’s Guide to the CARES Act issued by the U.S. Senate Committee on Small Business and Entrepreneurship:

 U S Senate Committee Small Business Owner's Guide to the CARES Act.pdf

Most states have issued their own guidance and relief programs for small businesses. You can search for your state in the Spreadsheet. The document is prepared by Gusto, and includes information on financial resources available due to the impact that COVID-19 is having on businesses. 

For tax implications of the CARES Act please see this document prepared by the tax law firm, Gutter Chaves Josepher Rubin Forman Fleisher Miller P.A.

Visit this NPR site for a great breakdown of the entire CARES Act.


To assist small business owners and startup entrepreneurs in better understanding the available relief programs our firm has created a comprehensive guide to them.

This guide provides information about the major sources and initiatives, how small business owners can access the programs, the criteria to qualify, and other eligibility requirements. We will update this page as we become aware of new initiatives to mitigate unexpected financial losses. 


Check out these COVID-19 small business grants that your business might be eligible for.

COVID-19 Business Grants and Loans


Economic Injury Disaster Loan Advance Grant

The Small Business Administration’s Economic Injury Disaster Loan (EIDL) program has received emergency funding and been given expanded powers from the federal government in response to the coronavirus pandemic. 

U.S. small business owners economically impacted by the COVID-19 outbreak can apply for an EIDL  directly from the SBA and receive working capital loans of up to $2 million. Applicants to the program can also receive a cash advance of up to $10,000 immediately, which will be forgiven if they spend the proceeds on maintaining payroll, paid leave, increased costs, mortgage or lease payments, or other financial obligations.

Paycheck Protection Program

The Paycheck Protection Program (PPP)  is a loan designed to provide a direct incentive for small businesses including, startup businesses, to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. To apply for the PPP, you should reach out to your current banking or financial institution to see if they participate in the program. If not, the SBA has a feature on its website where you can locate a participating lender by zip code.

The maximum size of a PPP loan is 250% of your average monthly payroll costs over the last 12 months, or $10 million (whichever amount is less). For most contractors, that means you should add up your average monthly payroll costs, including rent and utilities, and multiply that amount by 2.5 to get your max eligible loan amount. 

One important limitation is that eligible payroll costs only include annual employee salaries up to $100,000 (or $8,333, prorated on a monthly basis). Meaning, a small business owner cannot include monthly payroll costs for employees above the annual salary rate of $100K in their calculation of monthly payroll costs. For more information on this point, we recommend you reach out to the bank or financial institution you use to apply for this loan. 

If approved, PPP loans have a fixed interest rate of 0.5%. No collateral or personal guarantees are required by the small business owner. There are also no loan application fees of any kind. 

Who is eligible - This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by the novel Coronavirus/COVID-19.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.

Lenders can begin processing loan applications for small businesses and sole proprietors on Friday, April 3, 2020, according to the Treasury’s fact sheet.

If you are an independent contractor or otherwise self-employed, you can start applying on April 10, 2020.

Smart Asset has reported that the deadline to apply is June 30, 2020 . However, it’s better to apply as soon as possible because loans have a cap at $349 billion.

Please check out this link to a spreadsheet of participating lenders that has been crowdsourced by Gusto.

Please see this Payroll Protection Loan Eligibility and Forgiveness Calculator from Brad Feld:


We found this spreadsheet created by the Jewish Federations of North America useful to calculate the estimated amount of Payroll Protection Loan Eligibility for your business as well as the Estimated Forgiveness Amount for your business.

Facebook Small Business Grants Program

Facebook announced that it will offer $100 million in cash grants and ad credits to up to 30,000 small businesses across 30 countries. As of March 23, they weren’t yet taking applications but you can sign up to receive updates about the program here. They say applications will open in the coming weeks. Facebook also launched a Business Resources Hub to help guide businesses.


Who is eligible - 30,000 eligible small businesses in over 30 countries where they operate. We will share more details as it becomes available.


Google Aid for Small and Medium Businesses

Google is helping aid small and medium businesses (SMBs)  worldwide by providing $340 million in ad credits, which can be used at any point until the end of 2020 across Google Ads platforms. SMBs who have been active advertisers since the beginning of 2019 will see a credit notification appear in their Google Ads account in the coming months. This is part of a larger commitment from Google to support SMBs, health organizations and governments, and health workers on the front line of this global pandemic.


Who is eligible - The ad credits will be provided to SMB advertisers that have been active advertisers since January 1, 2019 and comply with all Google Ads T&Cs.

Goldman Sachs Support to Communities and Small Businesses

Goldman Sachs believes small business owners and start-up entrepreneurs fuel the engine of local and national economies all over the world. With that in mind, Goldman Sachs has committed to delivering $300 million across two separate initiatives to help small businesses and communities around the world:

  • Global Small Business Stimulus Package: A $275 million commitment to provide funding and lending to small businesses during this time of stress.

    • $250 million to provide emergency loans to small businesses across the country. As a start, they have partnered with the City of New York for a $20 million emergency loan facility that will bring flexible capital up to $75,000 to businesses with fewer than 100 employees  (apply here).

    • $25 million in grants to Community Development Financial Institutions (CDFIs) and other mission-driven lenders to ensure they have the necessary capacity to underwrite and deliver loans to small businesses as soon as possible.

  • Goldman Sachs COVID-19 Relief Fund: A $25 million commitment through Goldman Sachs Gives to support healthcare organizations, frontline responders, and the hardest-hit communities. To further encourage giving toward relief efforts, they have also established a special matching gift program for their people, up to a total of $5 million.

Business For All Grants (sponsored by Alice and Verizon)

$250,000 in grants will be awarded to businesses for all applicants, as a critical step towards tackling entrepreneurs’ single greatest barrier to growth: access to capital.  Grantees will be selected by an esteemed council of leaders from across the business ecosystem, representing diverse organizations, industries, locations, and demographics. 

Grants allocation 

  • One grand prize winner will receive a $50,000 business grant

  • Two runners up will each receive a $25,000 business grant

  • Twelve finalists will each receive a $10,000 business grant

  • Three business/entrepreneur support organizations will each receive a $10,000 grant to continue their work in supporting business owners. 


Who is eligible?

 a. Legal resident of the U.S., excluding Puerto Rico; 

b. At least 18 years old or older;

c.  Must be a legal for-profit business entity based in the U.S.; 

d. Applicants must be the business owner who is the founder and/or leading executive (President, CEO, CFO, COO, or any such other similar title). 

For more information please see Business For All Grants.

Employee Retention Credit 

CARES Act provides additional payroll-related relief to employers struggling to meet payroll obligations amid the COVID-19 crisis. Employee Retention Credit is a new refundable credit related to wages paid from March 13, 2020 through December 31, 2020 by an employer that continues to pay employees during a COVID-19 related shutdown or slowdown. In effect, the government will pay the employer to continue to pay employees. There is a maximum of 50 percent of qualified wages per employee, up to $10,000 per employee.

The Credit will be released as a refund/credit of the employer’s 6.2 percent share of Social Security payroll taxes. For example, if an employer is entitled to an employee retention credit of $10,000 and was otherwise required to deposit $8,000 in Social Security payroll taxes, the employer could retain the entire $8,000 of taxes as a portion of the refundable tax credit it is entitled to.


Who is eligible?

Any for-profit or tax-exempt business operating in 2020 whose:

  1. operations were fully or partially suspended during any calendar quarter during 2020 due to a federal, state or local COVID-19 shutdown order, or

  2. business remained open, but, during any quarter in 2020, had gross receipts for that quarter that were less than 50 percent of what they were for the same quarter in 2019. The employer will be entitled to a credit for each quarter until the business has a quarter where it has recovered sufficiently that its receipts exceed 80 percent of what they were for the same quarter in the previous year.

NYC Small Business Continuity Loan Program

To help small businesses deal with the impact of COVID-19, New York City has launched the NYC Small Business Continuity Loan Program. This program is available to New York City businesses with fewer than 100 employees that can demonstrate at least a 25% decrease in revenue as a result of COVID-19. Eligible businesses can apply for an interest-free loan up to $75,000; awards are first come first served. 

Who is eligible?

Businesses must:

  • Be located within the five boroughs of New York City

  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue

  • Employ fewer than 100 employees in total across all locations

  • Have been in operation for at least 2 years

  • Demonstrate ability to repay the loan

  • Have no outstanding tax liens or legal judgements.

COVID-19 small business resiliency fund in San Francisco, California

Because of the disruptions that COVID-19 has created for San Francisco’s small business community, the COVID-19 Small Business Resiliency Fund was created by San Francisco Office of Economic and Workforce Development (OEWD). It allows impacted small business owners to access up to $10,000 for employee salaries and rent. This program is administered in partnership with Northeast Community Federal Credit Union.


OEWD also works closely with other city departments to coordinate and connect recovery responses between impacted businesses and City departments. View COVID-19 Business & Employee Assistance Guide.


Who is eligible? -  small businesses must:

  • Have at least 1 employee and no more than 5 employees

  • Demonstrate a loss of revenue of 25% or more

  • Have less than $2,500,000 in gross receipts

  • Be engaged in activities that are regulated by the City and County of San Francisco and have a license/permit associated to that regulation.

Small Business Emergency Microloan Program in Los Angeles, California

In light of the sweeping impact the COVID-19 pandemic is having on Los Angeles small business community, the City of Los Angeles has responded swiftly and decisively to support their local, community businesses. The newly established Small Business Emergency Microloan Program now provides financing needed to strengthen small business enterprises in this time of acute need that have been affected by the COVID-19 outbreak.


Loan limit is $5,000 to $20,000 from 18 months to 5 years. For interest rates there are different options: 

  • Option 1:  0% for a term of up to 18 months,
      with repayment deferred for up to 6 months

  • Option 2:  3% for a term of up to 5 years,
      with repayment deferred for up to 12 months (for profit businesses)

  • Option 3:  2% for a term of up to 5 years,
      with repayment deferred for up to 12 months (for tax-exempt businesses)

Who is eligible?

  • For-profit and tax-exempt businesses in the City of LA with 100 or fewer employees that have been negatively impacted by the COVID-19 outbreak and will make their best effort to continue or re-establish their business operations and employees.

JP Morgan Chase Supporting small businesses and nonprofit partners

JPMorgan Chase deployed $8 million, including $5 million in the U.S. and $3 million in international markets to support vulnerable and underserved small businesses affected by COVID-19 in the following ways:

  • Helping Black, Hispanic and Asian Pacific Islander owned businesses that may struggle to access capital and keep their doors open. This includes entrepreneurs that have participated in the firm’s Entrepreneurs of Color Fund and Ascend in places such as Seattle, California and New York. Support will include working with local Community Development Financial Institutions that will provide low or zero interest loans and interest rate buydowns to help offset the costs of business slow-downs and unexpected challenges, as well as technical assistance support for issues like remote working capabilities.

The firm will also provide $2 million to existing nonprofit partners who are facing new challenges supporting vulnerable populations in response to COVID-19. The funds will go towards helping these partners maintain operational capacity as they adjust their programming and provide resources to support their remote working capabilities, resiliency planning, fundraising and communications.


The CARES Act  contains a number of federal income tax provisions intended to provide relief or liquidity to business taxpayers, including:

  • Provisions relaxing limitations on the use of net operating losses (NOLs) and suspending the prohibition on NOL carrybacks;

  • Provisions relaxing limitations on the deductibility of business interest; and

  • An acceleration of refundable corporate alternative minimum tax (AMT) credits.


NOLs - the CARES Act  relaxes the rules governing a business’s ability to deduct its net operating losses (“NOLs”). Under current law, the deduction of NOLs arising in taxable years beginning after December 31, 2017, generally is limited to 80% of the taxpayer’s taxable income. The CARES Act  removes this 80% limitation entirely for taxable years beginning before January 1, 2021. The 80% limitation remains in place for taxable years beginning after December 31, 2020.

  • Moreover, the current law provided that NOLs arising in taxable years ending after December 31, 2017, could not be carried back to prior years and could be carried forward indefinitely to future taxable years. The CARES Act restores a limited carryback, pursuant to which NOLs arising in taxable years beginning after December 31, 2017, and before January 1, 2021, may be carried back to each of the five preceding taxable years. The indefinite carryforward of these NOLs remains unchanged. 


Business Interest Limitation - The CARES Act temporarily relaxes some of the restrictions on the deductibility of business interest.

  • The CARES Act  increases the limitation from 30 percent to 50 percent of adjusted taxable income for taxable years beginning in 2019 or 2020 (except with respect to entities taxed as partnerships, as described below).

  • Election Out—A taxpayer is entitled to elect to continue to apply the 30 percent limitation for taxable years beginning in 2019 or 2020. Such an election might be desirable if an increase in interest deductions would result in less efficient use of other tax attributes (e.g., NOLs or foreign tax credits).

  • Special Rule for Partnerships—Under The CARES Act, the 50 percent limitation applies to entities taxed as partnerships only for taxable years beginning in 2020. If a partnership has excess business interest (i.e., business interest deductions in excess of the amount allowed under the general limitation) for a taxable year beginning in 2019, unless a partner elects otherwise, the CARES Act treats each partner's share of that excess as follows:

    • Half of the excess is treated as business interest paid or accrued by the partner in its first taxable year beginning in 2020 and is not subject to the general limitation on the deductibility of business interest.

    • The remainder is carried forward and is subject to the normal limitation applicable to excess business interest of a partnership. If a partner is allowed to deduct this amount in a taxable year beginning in 2020, presumably the 50 percent limitation (instead of the 30 percent limitation) described above would apply, unless the partner elected otherwise.

AMT Credits - The corporate alternative minimum tax (AMT) was repealed as part of the Tax Cuts and Jobs Act (TCJA). Any remaining corporate AMT credits were made available as refundable credits for years ending in 2018 to 2021. The CARES Act accelerates the ability of companies to recover those AMT credits, permitting companies to claim full refunds starting in 2018 and /or 2019 in order to access additional cash flow during the COVID-19 emergency.

Once the business submits the AMT Credit refund application, the Secretary of the Treasury must, within a 90-day period, review the application, determine the overpayment amount, and if there is an overpayment amount, credit or refund the amount to the business.


The Federal Reserve on April 9th took additional actions to provide up to $2.3 trillion in loans to support the economy. This funding will assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic. Once the Government releases new information relating to the loan, we will update the topic accordingly. 


The Federal Reserve has announced a $600 billion lending initiative designed for mid-sized businesses to ensure the easy flow of credit through the newly unveiled Main Street Lending program as part of a $2.3 trillion funding effort to minimize the financial impact of the coronavirus. The Main Street Lending Program  will enhance support for small and mid-sized businesses that were in good financial standing before the crisis by offering 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Principal and interest payments will be deferred for one year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. Banks will retain a 5 percent share, selling the remaining 95 percent to the Main Street facility, which will purchase up to $600 billion of loans. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. Borrowers must also follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. Firms that have taken advantage of the Paycheck Protection Program (PPP) may also take out Main Street loans.

What freelancers need to know about the coronavirus?

Great article from Freelancer's Union.



On April 8, U.S. Securities and Exchange Commission (SEC) issued an order granting relief to business development companies (BDCs) by permitting BDCs to issue and sell senior securities and participate in certain joint enterprises or other joint arrangements that would otherwise be prohibited by section 57(a)(4) of the 1940 Investment Company Act and Rule 17d‑1 thereunder. A BDC is a closed-end investment company that elects to be regulated under the 1940 Act. Here is brief summary of the regulatory relief applicable and relevant to funds and market participants:

  • Until December 31, 2020, BDCs can issue and sell senior securities by calculating an “adjusted asset coverage ratio” (AACR) based on portfolio values. 

  • Through August 15, 2020, funds are exempt from the in-person voting requirements to approve investment advisory agreements, principal underwriting agreements, auditors and plans regarding distribution-related payments from fund assets under Section 15(c) and 32(a) of the 1940 Act and Rules 12b-1(b)(2) and 15a-4(b)(2)(ii) under the 1940 Act.

  • Registered funds required to file Form N-CEN pursuant to Rule 30a-1 under the 1940 Act or Form N-PORT pursuant to Rule 30b1-9 under the 1940 Act are temporarily exempt from such filing requirements if certain conditions are met.

  • Registered funds are temporarily exempt from the requirements of Section 30(e) of the 1940 Act and Rule 30e-2 thereunder to transmit annual and semiannual reports to shareholders if the certain conditions are met.

  • Through August 15, 2020, registered closed-end funds (CEF) and BDCs are temporarily exempt from the 30 days’ advance notice requirement under Sections 23(c) of the 1940 Act and Sections 63 of the 1940 Act, and Rule 23c-2 thereunder if the fund files a Form N-23C-2 with the SEC prior to, including the same business day as, the company’s call of Section 30(e) of the 1940 Act  redemption of securities of which it is the issuer where certain conditions are met.

  • The SEC does not consider a registered fund’s failure to timely deliver to investors a current fund prospectus because of circumstances related to COVID-19 to be a basis for SEC enforcement action if certain conditions are satisfied.


LISC Rapid Relief and Resource Fund

LISC has mobilized to support the people and communities hit hardest by the Covid-19 pandemic. The money raised through the Rapid Relief & Resiliency Fund is:

  • Providing grants to women- and minority-owned small businesses that are the backbone of local economies

  • Supporting thousands of community-based organizations that serve clients in need

  • Delivering tech support and infrastructure to help residents and enterprises access work, school, commerce and social connection.

Grants will be made in the amounts of $5,000, $7,500, and $10,000.

Who is eligible - Must be 18 years of age to apply. For business owners with multiple businesses. Awards will be made to qualified businesses, and eligibility is based on accurate and complete submission. Priority will be given especially to entrepreneurs of color, women- and veteran-owned businesses and other enterprises in historically under-served places who don’t have access to flexible, affordable capital.

504 Certified Development Loan

504 Certified Development Loan Program offers long-term, fixed-rate financing for small businesses. It is designed as a low-capital way for businesses to buy new real estate or heavy equipment, allowing them to expand or repair their operations without having to seriously hurt their cash flow.

These loans provide up to $5 million in lending that can be paid back over a period of between 10 and 25 years (more in some highly specific cases). The borrower cannot use this money for overhead, payroll, debt servicing, inventory or any other general operating expenses. It can only be used on major, fixed assets such as real estate or heavy equipment. Per an SBA guidance, examples of acceptable 504 loan expenses include:

  • The purchase of existing buildings

  • The purchase of land and land improvements, including grading, street improvements, utilities, parking lots and landscaping

  • The construction of new facilities or modernizing, renovating or converting existing facilities

  • The purchase of long-term machinery

  • The refinancing of debt in connection with an expansion of the business through new or renovated facilities or equipment.


A 504 loan is issued on a three-way split. The small business itself typically covers 10% of the project’s financing (although in some cases the SBA may require up to 20%). A third-party lender such as a bank or credit union provides 50% of the project’s financing. This loan is issued as part of the 504 financing but is not backed by an SBA guarantee and so may be subject to the bank’s independent credit and collateral requirements.

The remaining 40% of the loan is issued by what is called a Certified Development Company, or “CDC.” These are nonprofit corporations organized to work with the SBA in providing small business financing such as 504 loans. The SBA guarantees and, in some cases, may even supply this lending to the CDC.

The underlying project is collateral for this loan, which lets the SBA and the third-party lender offer more generous terms and typically makes it easier for banks to finance this loan as there is an asset securing the loan itself.

The Booz Allen Foundation 

The Booz Allen Foundation has established a $1 million Innovation Fund to help nonprofits, entrepreneurs, thought leaders, innovators at colleges and universities, and startups and small businesses harness the power of data, technology, and diverse intellectual capital to improve COVID-19 relief efforts and make a difference. 

The Booz Allen Foundation is accepting applications from April 30 through June 5, 2020. Nonprofits can apply for grants of up to $100,000 and Individuals, teams of individuals, and eligible for-profit organizations can apply for microgrants of up to $10,000.


Who is eligible - The grants are open to individuals, teams of individuals, U.S. tax-exempt 501(c) nonprofit organizations, or small for-profit businesses.


Additional eligibility information includes:

  • Applicants (both individual applicants and application points of contact for organizations) must be over the age of 18.

  • Application points of contact and individual applicants must be U.S. citizens or permanent residents. (Note: Teams may have members that are not U.S. citizens as long as the lead application point of contact is a U.S. citizen or permanent resident.)

  • Organizations and individuals that apply must have U.S. bank accounts; individuals that apply must have a U.S. bank account in their name.

  • Organizations that apply must be organized in the U.S.


Nonprofit organizations that are not exempt from U.S. federal income tax under U.S. Internal Revenue Service (IRS) Code Section 501(c) may apply as small for-profit businesses—if the organization otherwise meets the criteria for a small for-profit business except for their nonprofit organization structure. For purposes of the Booz Allen Foundation Innovation Fund, small for-profit organizations are businesses that are organized in the U.S., are generally operated for profit, employ less than 100 individuals, and have an annual gross revenue of up to $3 million.

Magic Johnson Steps Up for Small Businesses 

Magic Johnson is collaborating with MBE Capital Partners to offer $100M in loans to minority-owned companies hurt by COVID-19. Yes, you read that right!


The NBA legend and business titan is using his platform to help minority- and women-owned companies who have been left out of funding from the Paycheck Protection Program due to a lack of relationship with bigger banks. The loans are being funded through EquiTrust Life Insurance Company and are poised to help 100,000 businesses in urban communities who might otherwise be shut out of aid. Applicants are being vetted according to SBA guidelines.


With the added financial help, Johnson hopes that these businesses can continue to thrive and strengthen their ties to the communities that they’re part of.

​​​​​To learn a more about the effects of the COVID-19 virus, please see our recent blog post on the subject. If you are a small business in need of an attorney to help with loan application documentation please reach out to us at (212) 262-9823 or e-mail @

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