In the midst of the COVID-19 pandemic, everyone is struggling – especially small businesses. In an effort to help the American people, the United States Senate passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 25, 2020.
The goal of the CARES Act is to provide direct financial relief to citizens and businesses during the economic fallout from the coronavirus pandemic. One of the main components of the legislation is emergency funds for small businesses. Borrowers can use SBA (Small Business Administration) funds for payroll expenses, rent, utilities, interest on mortgages, and other qualified expenses. Loan forgiveness is also available.
Details for small businesses
The CARES Act includes the Paycheck Protection Program (PPP). This provides $349 billion in funding to small businesses to prevent economic loss from the COVID-19 pandemic. The PPP is available to small businesses, veteran organizations, and tribal business concerns to cover payroll and other costs. You can apply when it becomes available.
It also expands the Economic Injury Disaster Loan Program (EIDL), adding $10 billion in funding to the SBA.
Am I eligible if I have a criminal history?
The CARES Act, at its base, is restructuring the way SBA 7(a) loans work to make them more accessible to the people who need them in this current emergency. However, will these SBA loans actually be accessible to everyone? Our attorneys decided to take a closer look.
The SBA generally excludes assistance to business owners who are on parole, probation, community supervision, or currently facing criminal charges. This could mean if you’re a business owner and facing a minor DUI, you may be ineligible for a loan under the CARES Act and therefore unable to pay your own employees. Our attorneys can provide guidance if you’re unsure of your status.
Even if you were convicted of a crime and have served the terms of your sentence long ago, the SBA may still have cause to disqualify you. Another requirement under SBA 7(a) loans is that applicants are of “good character,” which allows them to conduct a background check if you have prior convictions on your record. A previous criminal record does not automatically disqualify you from a loan, but it could put you at risk.
As new COVID-19 information and legislation emerges every day, you are right to be concerned about your small business. The attorneys at Delius & McKenzie, PLLC are here to advocate for you and help protect your company and your employees. We fight for clients in Sevierville, Seymour, Gatlinburg, Pigeon Forge, and the surrounding Tennessee locations. To discuss your rights, call us at 865-428-8780 or fill out our contact form to review your case.