CoronaVirus cell under microscope

The Two CARES Financial Support Programs For Small Business That Are Creating Confusion

We have been barraged with questions as to the small business loans and grants that are part of the Coronavirus Aid, Relief and Economic Security Act (CARES) which was passed in response to the COVID-19 pandemic on March 27th, 2020. It is important to note that there are two distinct programs in place for funding of small businesses emanating from the legislation.

The Economic Injury Disaster Loan Program (EIDL) includes a possibility of up to $10,000 in grant form to small businesses. These funds would not have to be paid back. This grant and financial assistance is separate from the Paycheck Protection Program (PPP). The EIDL was live on or around April 1 on the Small Business Administration website. The PPP turned live on April 3rd, but in reality, the banks’ lending departments only came on-line over the weekend.


The EIDL is a loan program which could include a $10,000 grant to small business. The grant portion of the loan would not have to be paid back. There are some requirements of the business to be eligible for the grant. And the grant offered might not be the full $10,000 depending on the size of the business and related costs.

You can access the loan and grant application right at the Small Business Association website:


Finally, just to be clear, the initial PPP lending phase of April 3 was aimed at companies with under 500 employees. The second phase, yet to be truly formed, will be released on April 10th and will focus on gig workers and 1099 subcontractors. However, companies that use the services of 1099 workers can in fact apply under the April 3rd PPP release and count those 1099 contractor payments as part of their overall payroll. Here is what the government sent out to summarize the look of all applications:

The documentation you will need for the PPP is usually available on your payroll software. Firms such as Pachex, SurePayroll and RunPayroll have acreated downloadable forms aimed at submission to the lenders. If those are not quite right, you or your payroll administrator can download the last 12 months of your monthly payroll forms, and submit those files manually. It does take time. The lender will also need state issued ID, your 940 or 941 quarterly reports, and other company information like your EIN. You will also need to gather all holiday pay and sick pay liabilities and payments. Finally, if you are including 1099 contractors as part of your payroll, you will need to file and submit those 1099s you filed in January, 2020 for tax year 2019 with the IRS to the bank as proof of 1099 contractor payments.

The actual submission online should take between 1.5 to 2 hours of time. Beware, that depending on your bank’s website, the application process can be slow due to busy internet and server traffic on their end. There have been some issues with lending institutions limiting customers’ access to applications as well. A summary is here from Forbes Magazine:

The Real Problem For Many – Many Clubs are a 501(c)7 Non-Profit and Not Included In Legislation

Perhaps the biggest issue facing the industry at this time is that social clubs, which included equity owned clubs in our industry such as country clubs and eating clubs, are excluded from the recent legislation. Social clubs are classified as 501(c)7 non-profit organizations, and at the present time are excluded from the possible financial help. The National Club Association and the Club Managers Association of America along with individual clubs are lobbying hard for this exception to be changed. We here at have also received samples of letters from Club Presidents asking club members to lobby their representatives in Washington DC.

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