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Client Alert: The Senate Passes the Coronavirus Aid, Relief and Economic Security Act

March 27, 2020

On March 25th, the Senate passed the bill entitled, the “Coronavirus Aid, Relief and Economic Security Act” (the “CARES Act”). This legislation is now before the House of Representatives. The CARES Act is intended to infuse approximately $2 trillion into the economy and provide relief to businesses and individuals. As of this writing (March 27th), the CARES Act is not yet law and we plan to track developments. For now, we would like to highlight a few features of the CARES Act that may be of interest to our clients:

Expansion of the Small Business Administration 7(a) Loan

Keep in mind that once the CARES Act is law, the SBA will then need to implement rules that incorporate the applicable portions of the CARES Act. The Senate bill requires that the SBA enact such regulations no later than 15 days after the CARES Act is enacted into law.

Given anticipated interest in the updated loan program, we suggest that companies that are interested in such programs proceed with the application process as soon as possible. To start the process, you would apply through banks, credit unions and other SBA-approved lenders. We expect the SBA to update its website with more information about the process, but for now, you can find out more information here. Among other things, you’ll see that in addition to the standard 7(a) loan program, the SBA also offers smaller loan programs, including the Economic Injury Disaster Loan Program (which provides small businesses with working capital loans of up to $2 million). The Disaster Loan Program is offered directly by the SBA and may make sense for businesses in need of less debt capital.

Expanded Unemployment Insurance for Gig-Economy Workers

Tax Relief for Workers, Families, Small Businesses and Distressed Industries

We plan to track the legislation through enactment and eventual rulemaking and publish updated client alerts as appropriate. 

If you have questions or would like additional information, please feel free to contact Amalie Tuffin at atuffin@hutchlaw.com, Ashley Pittman at apittman@hutchlaw.com or Dan Fuchs at dfuchs@hutchlaw.com.

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This Alert is provided for informational purposes only and is not intended to be, nor should it be construed as, legal advice on any specific matter, nor does it represent any undertaking to keep recipients advised of all relevant legal developments. This Alert does not create or constitute an invitation to create an attorney-client relationship, nor should it be construed as an advertisement or solicitation for legal services. This material may be considered Attorney Advertising in some states. Prior results do not guarantee a similar outcome.

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