Congress Provides Aid to Small Business Owners

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed by Congress and signed by President Trump on March 27 and is the most significant economic aid package of our lifetime…amounting to over $2 trillion. It provides a variety of financial relief to individuals, small business owners, and large corporations.

$350 billion is dedicated to aid for small business owners, defined as companies with less than 500 employees. If COVID-19 has negatively impacted your company, here are the basics of what you need to know about the Paycheck Protection Program (PPP) Loans:

  • Your business must have been in operation on February 15, 2020.
  • Calculate your average monthly payroll February 15, 2019 – June 30, 2019; multiply by 2.5 to get the maximum loan amount.
  • Excluded from the above calculation: Any employee or owner compensation over $100,000.
  • Use loan proceeds for payroll (salaries, commissions, etc.), group health care insurance; Interest on mortgage obligation; rent, utilities, interest on debt incurred before the covered period.
  • Loan is forgiven proportionate to maintaining employees and wages. Any unforgiven portion of the loan becomes a 10-year loan with a maximum interest rate of 4%.
  • Apply for your loan through your local banker. These loans are 100% guaranteed by the federal government.

The purpose of the PPP Loan is to help businesses keep their employees and avoid layoffs. The government has provided the banks an abbreviated application, and they anticipate having checks delivered within 30 days of receiving your bank approved/completed application.

What Should I Do Now?

  1. Contact your banker. I’m guessing bankers will be inundated with requests and applications, and you’ll want to get as close to the front of the line as possible.
  2. Contact your CPA. If you need help gather the required payroll data, your CPA can help you.
  3. Contact your financial advisor. Your financial advisor should be able to help you navigate this as well as the other programs available under the CARES Act.

Follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.



Financial Relief for Small Business Owners

  •  Loan up to 2.5X average payroll expenses
  • Loan is ‘forgiven’ if you maintain your employees
  • Contact your banker now!


Stewart H. Welch, III, CFP, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including  J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaireand 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by The Welch Group, LLC (“Welch”), or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. More information about The Welch Group and important Disclosures can be found on our website. Consult your financial advisor before acting on comments in this article.