This summary is being provided for education and information purposes only, and is not intended to be legal advice.
The linked PDF is a summary of the CARES ACT issued by the Senate Committee on Small Business & Entrepreneurship.
Regarding paycheck protection, the report lists the payroll costs that can be included in the loan amount, and makes it clear that only payroll costs go into the loan amount at 2.5 times average monthly payroll during the last year. Proceeds can be used for rent, utilities, other fixed costs, as well as payroll.
Debt forgiveness is based upon using the funds for payroll, interest, rent, utilities, and other fixed costs.. The summary does not provide guidance on how to calculate debt forgiveness if payroll is not maintained in full. Earlier guidance indicates that debt forgiveness will be based upon a prorated calculation and payroll as of the end of the covered period.
Note that 7(a) loans and SBA economic injury disaster loans cannot be used to pay the same expenses. The disaster loan should be used for expenses incurred after the paycheck protection loan proceeds have been expended.
The banks are saying that they are awaiting SBA guidance the application process, when may not be available until next week. This is a day to day matter.
Several accounting firms are publishing worksheets to calculate the allowed loan amount, as well as debt forgiveness. These are good resources to use in making these calculations.
These updated rules provide additional guidance for LLC members/partners and sole proprietors/independent contractors on calculating payroll costs, use of proceeds and ultimately figuring out how much of the loan can be forgiven.