Guidance on SBA Disaster Loans, AAFCPAs’ CARES Act Task Force Mobilized to Assist

UPDATE 4/16/20: Initial Round of SBA Disaster Loan Funds Exhausted; Now what?

AAFCPAs would like to make clients aware that the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act legislation, signed by President Trump on Friday, March 27th, 2020, creates two Small Business Administration (SBA) loan programs available to businesses to prevent devastation caused by the coronavirus pandemic, including:

  • The Economic Injury Disaster Loans (EIDL), funded earlier this month; and
  • The Paycheck Protection Loans (PPL), which are part of the CARES Act.

We know these are challenging times and that caring for your employees and customers is your top priority. AAFCPAs’ CARES Act Task Force has dedicated resources to assist business owners in filing for SBA relief loans.

How may we help?

AAFCPAs can assist in determining the loan options that best meet your needs. Time is of the essence for the loan applications as it is first come, first served as funds are made available. Processing times are projected to increase as more businesses apply. We urge clients to submit the EIDL application as soon as possible and gather information for the PPL application so once it is released you are ready to submit. There is complexity around determining which loan to apply for or whether it makes sense to apply for both. There are also implications on the loan amount if you plan to apply for payroll tax credits under the Fair Labor Standards Act (FLSA). Please let us know if we may help.

EIDL: AAFCPAs assists clients by completing the initial application in order to free up your time to focus on your business. We can help you get your application in quickly, accurately and with the appropriate information. As the application process progresses, we can also assist you in the later phases of information gathering and responding to any requests.

PPL: AAFCPAs advises clients to ensure you are maximizing your opportunity for debt forgiveness by analyzing full time employees (FTEs), rate of pay, and other variables. We assist with analyzing this calculation. Businesses should also implement policies and procedures to ensure the business is spending the monies in accordance with the loan requirements and that procedures are in place to capture the appropriate information and support in order to maximize any debt forgiveness.

What is the process to obtain a loan?

The process remains unclear at this point; however, it appears each loan will have different potential entry points:

  • EIDL – We believe that these will continue to be originated with the SBA and initiated via the online SBA portal.
  • PPL – The CARES Act provides the ability for other banking institutions, other than the SBA, to originate these loans. That means your regular lender, if it is SBA approved, could originate these loans. Current lenders through the Small Business Administration 7(a) can be found at:

What is the timeline?

While we do not know the exact timeline, the bill requires the SBA to issue implementing regulations within 15 days and the U.S. Department of Treasury will be approving new lenders.

Do I qualify?

As mentioned above, there appear to be two paths for obtaining financing. The premise of the Paycheck Protection Program and its related debt forgiveness is to incent businesses to retain and pay as much workforce as possible and you will see much of the focus of the lending and debt forgiveness is centered around payroll and workforce calculations.

Program Detail SBA Economic Injury Disaster Loans [Changes] Paycheck Protection Loan
per the CARES Act
Loan Program Amount $50 billion $349 billion
Loan Amount Up to $2.0 million –The SBA will use a formula to determine the amount.

[No change to loan amount; however, Emergency Advance of $10,000 available within 3 days]

Up to $10 million maximum based on a multiple of 2.5 times the average monthly payments by the applicant for payroll costs incurred in the 1-year period before the date on which the loan is made

Except in the case of a seasonal employer then it is the average of the payroll of the 12-week period beginning on February 15, 2019 and ending June 30, 2019

Loan Proceeds Use Payroll expenses, paid sick leave, accounts payable, debt service. Payroll costs, benefits costs, salaries and commissions, mortgage interest, rent, utilities, and interest on debt incurred before February 15th
Interest Rate 3.75% for business and 2.75% for nonprofits 1%
Terms Up to 30-year terms 2 years from deferral period


Business Size Revenue and employee qualifications based on NAICS code. Revenue restriction would be lifted but company must be under 500 employees

*If NAICS code starts with 72 (restaurant and hospitality), employee size is determined by location and cannot exceed 500.

Debt Forgiveness No provision for debt forgiveness Provides for debt forgiveness based on a formula with inputs related to payroll costs, FTEs and any reduction in employee pay. Some or all of the debt forgiveness may not be taxable if certain conditions are met.
Deferral of Payments 30 days Minimum of 6 months, up to 1 year
Personal Guarantee Required by owners of 20% or more of the company, or at least one guarantor [Waived on advance of less than $200,000] No personal guarantee or collateral required
Prepayment Penalties Waived Waived
Approval Documentation Requires tax return submission [No tax return submission required. Based solely on credit score or other alternative assessment of ability to pay]




Good-faith certification:

–         Fund operations during COVID-19

–         Fund payroll, mortgage, lease and utility payments

–         No other application under program for same purpose

–         Has not received duplicative amounts under this program

Organizations are advised to reference the U.S. Department of the Treasury website for the most up-to-date guidance & interpretation of the CARES Act Assistance for Small Businesses.>> New FAQs are issued regularly to address borrower and lender questions.

If you have any questions, please contact your AAFCPAs Partner or Carla McCall, CPA, CGMA, at 508.981.2743 or

AAFCPAs’ CARES Act Task Force

AAFCPAs has formed a Task Force dedicated to studying and advising clients on the business implications of the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act legislation, signed by President Trump on Friday, March 27th, 2020. Our CARES Task Force includes senior leadership and advisors from diverse segments of our organization, bringing the necessary talent together to best advise on the changing dynamics caused by the Coronavirus.

The benefits provided under CARES require thoughtful planning and will vary depending on your Company’s situation.  We can help you understand what is available and how and what to apply for, including the calculation needed to determine which loan program may be most beneficial.

Resources have been mobilized in the following areas:

  • Tax law changes
  • Business Impact Diagnostic Assessment
  • SBA Loan Assistance
  • Debt Forgiveness Reporting
  • Financial forecasts and cash flow projections
  • HR Consulting: Understanding the Families First Coronavirus Response Act (FFCRA) & Unemployment

The Task Force will continue to issue written guidance as appropriate. Please reach out to your AAFCPAs’ partner with any questions.

We are here for you! Together, we will make it through this difficult time of change.


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