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How the CARES Act Could Impact You

Education Posted on April 6, 2020

Unprecedented times call for unprecedented measures. On March 25, 2020, the United States Senate passed the Coronavirus Aid, Relief and Economic Securities Act (CARES Act), created to provide financial relief for Americans and businesses in response to the impending economic fallout from the COVID-19 pandemic.

In short, the CARES Act aims to do the following:

  • Keep American workers paid and employed through Small Business Job Retention Loans
  • Assist American workers, families and businesses with economic impact payments, tax rebates and credits, and expanded unemployment insurance
  • Stabilize and assist the American economy
  • Provide relief fund for state, local, and tribal governments

Small Business Administration Loan Programs

Under the CARES Act, the Small Business Administration is empowered to provide two loan programs: Economic Injury Disaster Loans and Paycheck Protection Program. While both programs provide a short term solution for small businesses in need, there are some major differences between the two. Business owners can apply for both programs simultaneously but need to ensure that expenses are differentiated. In order to utilize both facilities at the same time, the business should use the proceeds to cover eligible, but a different set of expenses. Duplication of expense payments should be avoided

The Economic Injury Disaster Loan Program (EIDL) is administered and approved by the U.S. Small Business Administration (SBA) and can provide up to $2 million in financial assistance in the form of a loan, based on the amount of economic injury. Loan size and loan repayment period are determined by the SBA. This program offers an advance up to $10,000 (determined by the SBA) to cover immediate costs that do not have to be repaid if the applicant’s EIDL is not approved. If the loan is approved, the payments are automatically deferred for 12 months. Applicants apply directly to the Small Business Administration at

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The Paycheck Protection Program will be administered through local, SBA approved lenders and authorizes up to $349 billion in forgivable loans to small businesses, specifically to cover payroll costs, and most mortgage interest, rent, or utility costs. Loan forgiveness is granted if funds are used on eligible expenses within 8 weeks of receipt, and applicant demonstrates that the employee headcount at the time of forgiveness is the same as the time of original application. If employee headcount declines at the time of forgiveness, the amount of forgiveness is prorated and the balance is treated as a loan at 1% for up to 2 years.

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Economic Impact Payments

In Virginia alone, 115,000 people applied for unemployment support during the week of March 23. As businesses begin to close, many workers have been furloughed or laid off indefinitely.

In an effort to provide additional financial support to Americans in need, eligible taxpayers could be eligible to receive an Economic Impact Payment. Tax filers with an adjusted growth income up to $75,000 for individuals and $150,000 for married couples filing joint returns will receive the full payment of $1,200 or $2,400, respectively. For those who exceed the maximum adjusted growth income, guidelines are available on the IRS website.

The IRS will automatically distribute payments in an estimated 3 week’s time.

Tax Credits

In a separate piece of legislature, signed on March 18, 2020, the Families First Coronavirus Response Act provided small and midsize employers with refundable tax credits that will reimburse the cost of providing paid sick and family leave wages to employees on leave for COVID-19. The act provides coverage for employees who are sick themselves or have a family member who is sick. This empowers employers to do what’s best for the health and safety of their employees and their communities.

We’re Here to Help

The Carter CARES Task Force and the entire Carter Bank & Trust family is working diligently to provide continued updates and support to small businesses, individuals, and communities.

If you are in need or have questions about how we can help, please visit our COVID-19 Resource Center to explore more ways you can find relief during this difficult time.

We’re only a phone call away.

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