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One aspect of the CARES Act of 2020 that's especially relevant to ESOP companies is the relaxation of the SBA's Emergency Injury Disaster Loan (EIDL) program requirements.
Section 1110 of HR 748 notes that ESOPs with fewer than 500 employees are now eligible for EIDL grants until December 31, 2020. $10 billion has been specially allocated for EIDL grants in relation to the Coronavirus epidemic.
Historically, EIDLs have offered up to $2 million in low-interest rate financing, over 30-year terms, with a one-year deferral on the loan's first month payment. Under the CARES Act, EIDL provisions have been further expanded as follows:
For more information or to apply for an EIDL grant, visit the SBA’s disaster assistance portal.
Overall, the CARES Act significantly expands SBA’s lending programs. This includes $349 billion to guarantee loans to small businesses impacted by the Coronavirus. If you have questions about how the CARES Act relates to your planned or current ESOP, our team is available to assist. Click here to schedule a call.
Topics: ESOP Resources
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