The CARES Act offers loan relieve to small businesses that are or were harmed by COVID-19. Robison Law Group LLC would like to keep you up to date on the CARES Act (the “Act”). related to COVID-19. As you know, it was passed by congress and signed by the President last week.
Below are links to guides that provides a summary of the CARES Act as well as how it may apply to marijuana and hemp businesses.
Many cannabis stakeholders would like to know if qualify for any relief related to Act.
SIGNIFICANT PORTIONS OF THE LOAN PROCEEDS SHOULD BE FORGIVEN. Under the Payroll Protection Program section of the bill, “Small businesses will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020.” Congresses definition of “harmed” is vague. The Act “requires eligible borrowers to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19; they will use the funds to retain workers and maintain payroll, lease and utility payments; and are not receiving duplicate funds for the same uses from another SBA program”.
WE ENCOURAGE HEMP STAKEHOLDERS TO SEEK OUR ADVICE AND APPLY.
If you feel like you qualify for a loan under the Act, you should do the following:
- Contact us regarding your business and business activities at firstname.lastname@example.org, include your businesses legal name (and address) and tradenames (and addresses) and, if not a current client with an engagement agreement in place with the Firm, please provide a general description of your business.
- After consulting with us, we may advise you to contact your banker and tell them you want to apply for an SBA sec. 7A loan pursuant to the CARES Act.
- If the bank acts like it does not know what you are talking about, the bank is not informed about the Act as it should be yet, but it almost certainly will be soon. The bank will be informed as all banks that are FDIC insured should be required to offer these loans.
- Credit Unions may be able to soon follow, though it’s unclear yet. The deadline to apply for these loans is June 30, 2020.
Again, hemp businesses” may be eligible and, unfortunately, “marijuana businesses” likely are not eligible for these loans, but we recommend that you contact us to discuss further. In an uncertain times and our unique industry, we do not “guarantee” that you are eligible, but we think impacted hemp businesses should apply. We are here to help you.
Affected businesses are entitled to an SBA loan of up to 250% (2.5x) monthly average payroll costs during that period. This includes owners’ salaries, employee’s salaries, employee health care benefits, and employer retirement plan benefits.
For example, if your average monthly payroll cost is $20,000, your loan maximum would be $50,000. The loan proceeds if used for (i) payroll, (2) rent, (3) utilities, or (4) interest on mortgage payment for business property during the first 8 week period following the loan funding, would be forgiven. Any additional proceeds over and above those costs would need to be paid back over a 10 year period at a 4% rate.
Please contact the Robison Law Group LLC at email@example.com; or call +1-303-819-5683.