Capitol Report

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April 6, 2020

Federal stimulus package offers Small Business Administration loans, quick relief

A number of programs have been set up by the Small Business Administration (SBA) to help small businesses impacted by coronavirus shutdown orders. President Donald Trump signed the CARES Act, a federal stimulus package designed to resuscitate the economy by keeping small businesses afloat and keeping employees working. A number of programs are available to help these businesses, including:

   Paycheck Protection Program: Small businesses with up to 500 workers will be able to apply for forgivable loans under the Paycheck Protection Program (PPP). The money must be used toward job retention and certain other expenses. The program is open to small businesses as well as eligible nonprofit organizations, veterans organizations, tribal businesses, and individuals who are self-employed or independent contractors if they meet certain standards.

   Loans of up to $10 million are available using an average of eight weeks’ expenses as determined in the program guidelines

   Loan payments will be deferred for six months

   SBA will forgive the portion of the loan proceeds used to cover the first eight weeks of payroll and certain other expenses following loan origination

   Economic Injury Disaster Loans and Loan Advance: Small business owners are eligible for a loan advance of up to $10,000 to help overcome the temporary loss of revenue they are experiencing. Funds will be made available within three days of a successful application and will not have to be repaid.

   SBA Debt Relief: Relief is available for small businesses for principal and interest of new 7(a) loans issued prior to Sept. 27, 2020. The SBA will also pay the principal and interest of current 7(a) loans for a period of six months.

   SBA Express Bridge Loans: Loans are available to small businesses that currently have a business relationship with an SBA express lender to access up to $25,000 to help overcome the temporary loss of revenue and to bridge the gap while applying for a direct SBA Economic Injury Disaster Loan. There is a quick turnaround time for this type of loan, and it will be repaid in full or in part by the proceeds of the Economic Injury Disaster Loan.

The New Jersey Department of Labor is urging businesses to keep employees on the payroll throughout the COVID-19 pandemic, and to take advantage of the payroll tax credit provided under the Families First Coronavirus Response Act. The act provides support to employers to provide federal Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave to workers affected by COVID-19. The tax credit immediately and fully reimburses employers with fewer than 500 employees by allowing them to reduce their federal payroll taxes by the amount spent on emergency leave.

The NJSBA has been offering webinars with the most up-to-date information and resources to navigate the issues and answer questions about SBA loans. For more information, visit For information on the various SBA loan programs, go to And to get more information on how to apply for the Paycheck Protection Program or any other loans that are available for your small business, owners are advised to reach out to their banks as soon as practicable, as funds are capped.

This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as

amicus in appellate court matters.