Aid program details begin to emerge

The state of Connecticut has posted a small business owner’s guide to emergency funds to stay afloat during the coronavirus pandemic, including for the new Paycheck Protection Plan loans of up to $10 million that convert to grants if companies maintain their existing workforces.

The state Department of Economic and Community Development has posted the guide online at portal.ct.gov/DECD. The U.S. Small Business Administration has a similar checklist at sba.gov, with details on eligibility.

Congress included the $349 billion Paycheck Protection Program as part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, with the CARES Act to generate payments this month of $1,200 for individuals and $500 for children for most earners.

To fund immediate needs, businesses can apply for Emergency Economic Injury Grants of up to $10,000 in advance of larger Economic Injury Disaster Loans of up to $2 million from the SBA. The money can be used to keep employees on payroll, pay for sick leave and fund other obligations, including inventory, debts, rent and mortgage.

Under the larger Paycheck Protection Program, businesses and nonprofits operating since Feb. 15 with fewer than 500 employees can apply for loans through the end of June, equal to up to 2.5 times their average monthly payroll costs including health insurance premiums. The program cannot be used to cover compensation above $100,000 for any single individual, with pay for overseas workers similarly barred.

For companies that retain workers at their accustomed wages, principles will be forgiven for up to eight weeks of payroll, with sole proprietors and independent contractors allowed to apply to cover the costs of their self-employment.

The loans include a maximum deferral of up to a year; any amounts not forgiven carry terms of up to 10 years at interest rates of up to 4 percent.

Money can be used for compensation as well as other key business expenses like rent, mortgages, loan interest and utilities.

Loans do not carry fees and are available from banks that lend under SBA’s existing 7(a) guaranteed loan program