Coronavirus Aid, Relief, and Economic Security (CARES) Act Updates

Firstrust Bank is committed to offering timely insights to our Business Customers on the proposed Coronavirus Aid, Relief, and Economic Security (CARES) Act. We will continue to monitor the situation and communicate more information as it becomes available.

March 31, 2020 - Lenders just received information from the Treasury Department and US Small Business Administration. Small businesses and sole proprietorships can apply for PPP loans starting April 3, 2020. Independent contractors and self-employed individuals can begin applying on April 10, 2020.

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of .5%.

For more information, see our CARES Act Guide & Checklist for Small Businesses that outlines how you can start preparing for the application in advance and visit our COVID-19 Business Resource Center for more information about the SBA CARES Act PPP program.

March 27, 2020 - The CARES Act has been signed into law, providing $2 trillion in economic relief for households and businesses in the United States. This Act includes a Payroll Protection Program for small businesses that will provide $350 billion of loans designed to keep employees on the payroll and businesses running.
The Secretary of Treasury has communicated that loans through the Payroll Protection Program will not be available until later next week. There are a lot of questions that still need to be answered by both the Treasury Department and the US Small Business Administration before lenders can begin to offer businesses these loans.
Here are important highlights from the CARES Act:

  • It authorizes $350 billion for three months of 100% guaranteed 7(a) loans to cover payroll costs, interest on mortgage payments, rent obligations, and utilities.
  • The program will run from February 15, 2020 through June 30, 2020.
  • Small businesses including self-employed and individual contractors can apply.
  • The maximum loan size for borrowers is capped at the lesser of 250% of the average monthly payroll costs (with a lookback of one year or relevant period for seasonal businesses), or up to a maximum of $10 million.

  • Payments on these loans must have a 6-month deferral of principal and interest.

  • Forgiveness is not taxable.
  • There is no collateral or personal guarantee required.
  • There are no upfront or ongoing borrower fees.
  • There is no prepayment penalty.
You can stay informed about the many resources and programs available to you by visiting our Covid-19 Business Resource Center.  Or, for more information about other financial resources offered by the US Small Business Administration, you can visit