Changes to the CARES Act and the PPP: Here’s What You Need to Know

The Coronavirus Aid, Relief, and Economic Security (CARES) Act and The Paycheck Protection Program (PPP) have helped to sustain many businesses during this unprecedented time. For the past few months, these government assistant plans have been a ray of hope as small businesses have continued to struggle from the unexpected loss of income. Black businesses have especially been hit hard, as they are disproportionately affected by the global pandemic. 

CARES Act Updates: 

Over the summer there have been numerous amendments to the CARES Act as legislation hurries to create a stable plan to reposition the economy for prosperity. Read below for a detailed overview of important updates and reminders:

– July 31 marks the end of the CARES act’s $600 weekly benefit with no replacement or extension. 

– The GOP proposed a stimulus package called the HEALS Act, to extend federal unemployment aid to help those affected by the pandemic

– The proposal would reduce the $600 extra unemployment benefit — called the Federal Pandemic Unemployment Compensation (FPUC) to $200 until Oct. 5. The assistance amount would combine with the states’ unemployment offerings to equal 70% of an individual’s previous wages until Dec. 31, 2020.  

– The HEALS Act was officially proposed, negotiation with Democrats will begin. 

– The Treasury and the United States Postal Service reached an agreement on terms of CARES act.

– The material terms and conditions of a loan of up to $10 billion to the USPS under Section 6001 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan will be documented in an agreement to be developed and executed by Treasury and the USPS. 

– The CARES Act approves USPS to borrow up to $10 billion from the Treasury for operating expenses only when USPS determines that, due to the COVID-19 emergency, without borrowing money they will not be able to fund operating costs.

26 weeks of funding is what most states provide. Although, some states such as Georgia, limit benefits to 12 weeks. However, states such as Delaware will provide benefits for up to 30 weeks. With some exceptions, the weekly benefit amount depends on an applicant’s gross income when they were employed and ranges between $300 and $600. Mississippi pays up to $235, while Massachusetts’ maximum is $1,220. (Cnet)

PPP Funding Updates: 

Along with the CARES Act, the government has allocated funding to the Payment Protection Program (PPP). When the pandemic began affecting the American economy a major concern for businesses was meeting payroll. Similar to the CARES Act the number of stipulations to receive these resources have drastically increased due to concerns of legitimacy. Read below for a detailed overview of important updates and reminders:

The $659 billion funded under the Small Business Administration (SBA)—Business Loans Program Account is intended to provide loans to businesses to guarantee eight weeks of payroll and other costs to help those businesses remain viable and allow their workers to pay their bills.

– The PPP loan program restarted, following the appropriation of new funding on Friday, April 24, 2020.

– PPP loans are available for the lesser of $10 million or 2.5 times your average monthly payroll.

– 100% of your loan could be forgiven if you follow guidelines. 

– Passage of the PPP Flexibility Act of 2020 relaxes many PPP loan guidelines.

– You can apply for both a PPP and EIDL loan.

– Check eligibility before you apply.

– You can apply through an SBA approved 7(a) lender.

In addition to meeting the size requirement (500 or fewer employees for most companies), you must show that your business has been negatively impacted by the coronavirus. 

– Following approval by the Senate and House of Representatives, President Trump signed legislation on July 4, 2020, extending the deadline to apply for a Paycheck Protection Program Loan through Aug. 8, 2020. The original deadline to apply was June 30, 2020. (Business Insider). 

– The newly passed legislation involves more than $130 billion left in the PPP program and makes those funds available until the new deadline at which point Congress will have to re-appropriate any remainder. (Washington Post).

The Bottomline

As fall approaches every American student, worker, and business is facing a new reality with unique challenges. The CARES Act and PPP Funding have helped businesses stay afloat during this time. However, with so much uncertainty surrounding job security and the health of the economy moving forward, citizens are eager for long-term plans. Currently, legislation is performing a balancing act of maintaining survival while also attempting to plan for a recovering success. 

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Walker’s Legacy is a digital platform for the professional and entrepreneurial multicultural woman and exists to inspire, equip, and engage through thought-provoking content, educational programming, and a global community.

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