The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 to provide $2.2 trillion to U.S. citizens and businesses afflicted by the COVID-19 outbreak, including $349 billion for financing “small businesses” under the Paycheck Protection Program or PPP. Under the PPP, eligible small businesses are entitled to receive loans up to $10 million (calculated based on payroll records) guaranteed by the Small Business Administration (“SBA”) at a fixed interest rate of 1% for a two-year term. Notably, the PPP loans may be forgiven, in part or in whole, if the proceeds are used to retain and pay employees, rent, utilities and interest on mortgage obligations during the eight-week period following loan origination. On April 24, the CARES Act was amended to increase the appropriation level for PPP loans to $670 billion.
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