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CARES Act - Eligibility & Application for Loans

Please Note: If you are a provider with Atlantic Health Partners, Atlantic Medical Group or Primary Care Partners, your leadership team is actively working with these entities on your behalf. Please contact them for further details.

What is it and Who is Eligible?

Coronavirus Aid, Relief and Economic Security Act (CARES Act) Phase III: Small Business Loans:

The CARES Act Phase III provides small businesses access to $349 billion in loans (with debt forgiveness options); available for businesses with less than 500 employees, as follows: 

  • The loan proceeds can be used to cover payroll support, such as employee salaries, paid sick or medical leave, insurance premiums, and mortgage, rent, and utility payments incurred from February 15, 2020, through June 30, 2020. The maximum amount of a loan equals 2.5 months of regular payroll expenses (subject to a cap of a $100,000 of annual salary per employee). PCP’s current monthly payroll is ~$2M (excluding owner draws: ~$1.1M)
  • Borrowers are eligible for loan forgiveness equal to the amount spent by the borrower during an eight-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.  So, at this point, it looks like they are incentivizing the re-activation of furloughed employees/re-hire of employees with forgiveness.  Accordingly, consider applying for the Phase III loans if the forgiveness of payroll expenses after the origination date of the loan will help you re-activate/re-hire personnel.
    • Borrower and lender fees are waived.  
    • Collateral, personal guarantee, subsidy requirements are waived (interest rate set at 2/15/20 level)
    • The maximum interest rate is 4% and loan maturity can be as long as 10 years.  
    • No prepayment fees will be charged.  Loan payments can be deferred for  six to 12 months.
    • Two eligibility criteria = good-faith certification of need for the loan plus agree to not to terminate employees.
    • The maximum loan amount is a multiplier (2.5x) of average monthly payroll costs up to $10M cap.
    • Businesses can use loans for almost all operating costs.
    • Debt forgiveness up to the principal loan amount for certain costs incurred during the covered period
    • Forgivable amounts = payroll costs; interest payments on loan obligations; rent; and utilities.
    • Forgiveness amounts reduced for firing employees or cutting wages.