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As Congress hashes out the final details and provisions of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act” or the “Bill”), businesses and individuals alike are hoping for the prompt completion of the much-needed stimulus benefits provided therein.


On Tuesday afternoon, Congress members described the Bill to be “at the 2-yard line’’ and “in the red zone” … a coincidental reference to the only major American sport whose season has not yet been disrupted by COVID-19.

The proposed legislation of the CARES Act includes multiple sections aimed at providing direct and indirect financial relief to businesses and individuals severely affected by the COVID-19 pandemic. Division A of the Bill addresses direct financial relief to small business concerns around the country through temporary amendments to the Small Business Association (“SBA”) 7(a) Loan Program.

Under the most recent draft available, the Bill stands to extend both the eligibility requirements and availability of funds under the current 7(a) Loan Program to assist small businesses in covering payroll and operating expenses during this difficult time. In addition, the Bill would include provisions for the deferral of payments on such loans, as well as loan forgiveness on certain funds utilized to maintain payroll costs through the covered period (subject to specific restrictions/reductions). As an incentive to financial institutions, the Bill also includes an increase to the percentage guaranteed by the SBA during the covered period.

Once the CARES ACT is passed by Congress and signed into law by President Trump, the SBA will have 30 days to provide guidance and regulations implementing the provisions of the Bill.

SBA Loan Application (SBA Form 1919) – Please note it may be the case that a separate application will be required relating to the amended program.

Personal Background and Financial Statement –To assess your eligibility, the SBA also requires you to complete the following forms:
  • Statement of Personal History (SBA Form 912)
  • Personal Financial Statement (SBA Form 413).

Business Financial Statements –To support your application and demonstrate your ability to repay the loan, prepare and include the following financial statements:
  • Profit and Loss (P&L) Statement – This must be current within 180 days of your application. Also include supplementary schedules from the last three fiscal years.
  • Projected Financial Statements – Include a detailed, one-year projection of income and finances and attach a written explanation as to how you expect to achieve this projection.

Ownership and Affiliations –Include a list of names and addresses of any subsidiaries and affiliates, including concerns in which you hold a controlling interest and other concerns that may be affiliated by stock ownership, franchise, proposed merger or otherwise with you.

Business Certificate/License –Your original business license or certificate of doing business. If your business is a corporation, stamp your corporate seal on the SBA loan application form.

Loan Application History –Include records of any loans you may have applied for in the past.

Income Tax Returns – Include signed personal and business federal income tax returns of your business’ principals for the previous three years.

Resumes –Include personal résumés for each principal.

Business Overview and History – Provide a brief history of the business and its challenges. Include an explanation of why the SBA loan is needed and how it will help the business.

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