What is the CARES Act Sec 1101 Maximum Loan Amount?

What is the CARES Act Sec 1101 Maximum Loan Amount?

Question: What is the maximum loan amount available to my small business (<500 employees) under the government rescue package? Answer: The CARES Act provides loans to small businesses up to $10 million. To determine how much your business is eligible for, you must average your monthly payments for the year preceding the loan date for the following expenses: Payroll, including related benefits such as:

  • Vacation
  • Parental, family, medical, or sick leave
  • Allowance for separation or dismissal
  • Payments required for the provisions of group health care benefits including insurance premiums and
  • Payment of any retirement benefit

EXAMPLE: So, let’s say for the year ended March 31, 2020 your payments averaged the amounts shown below: Monthly Average

  • $25,000 Payroll (salaries for employees earning less than $100,000/year)
  • $3,100 Payments to former employees
  • $5,900 Healthcare insurance, PTO, etc.
  • $1,000 Retirement Benefits

$35,000 Total monthly average
× 2.5
$87,500 Maximum loan amount

There are provisions for deferring loan repayments up to one year as well as the potential for forgiveness on the loan under certain conditions.

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