Good morning


While we all wait for the final regulations over the next few weeks most employers in the United States will be seeking a loan under the Paycheck protection program.

Earlier this week my readings indicated limitations for companies that have already laid off workers.  This was not covered in my readings this morning.

The regulations are still to be written but the loan decisions are at the bank level not the SBA level.

Summary of Paycheck protection program:

What follows below is a summary of the stimulus package as it relates to small business.  Small business is defined as less than 500 employees.

Quick no noes:

Bars companies from interfering in an effort by employees to form a union

Paycheck protection program:

  • Loan maximum of $10 million
  • Who Qualifies:
    • Companies with less than 500 employees
    • Multiple locations
      • Less than 500 per location – restaurants, food service, and hospitality
  • Must have started business before 2/15/20 and have payroll or independent contractors before that date.

Companies must certify that:

  1. uncertainty made the loan necessary.
  2. funds will be used to maintain workers and payroll, and make mortgage, lease and utility payments;
  3. the loan request is not duplicative of other amounts applied for through the SBA; and
  4. during the period between February 15, 2020, and December 31, 2020, the eligible recipient has not received amounts from the SBA for a duplicative purpose.

Funds used to

  • Maintain workers
  • Maintain payroll up to $100,000 annually per employee
  • Payments for mortgage / rent / utilities
  • Group health benefits/ insurance premiums (assumed to employee related) / interest on any other debt obligation.

Note:  Principal payments on loans cannot be paid from the loan proceeds.

Loan overview:

  • Only one loan from SBA for this purpose 2/15/20 to 12/31/20
  • Loans are non recourse and require no collateral.
  • Period covered is 2/15/20 to 6/30/20 at this time
  • Lenders make loan decisions not SBA
  • Loan is for a 10-year maximum period
  • Loan interest caped at 4%

Loan forgiveness:

  • 8 weeks of payroll beginning when the loan is made.
  • Mortgage interest/ rent / utilities
  • Any amount forgiven will not be taken into income.  It is assumed the disbursements for said costs are tax deductible.  If not, the company will in effect have less costs and most likely a tax impact.

Executive compensation:

During restricted period no officer / non Union employee whose total compensation exceeds $425,000 in 2019 may be paid more than their 2019 compensation.

Special rules for those  making over $3 million.

Total compensation includes:  Salary / bonus/ stock award and other financial benefits.

We / I  prepared for the current work and have resources in place that allow us to continue to serve you seamlessly. Please rest assured that our advisory firm is — and will continue to be — up and running, working to serve your best interests. CRL is monitoring COVID-19 related developments and issuing alerts about how emergency measures are likely to affect our clients.

Please contact Armand at 508 451 7500.



We are a Boutique strategic financial consulting firm servicing midsize enterprises in transition. Turning financial challenges into opportunities for a bright future. CRL is an award winning nationally recognized firm leading enterprises through unique challenges.

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