The Cares Act and You

Due to the recent economic disaster, COVID-19, the government has been working diligently on different plans to help businesses across the country. The two plans that will affect most of our clients at Mitz & Rozansky, SC are The CARES Act and the Families First Coronavirus Response Act. We have conducted extensive research on the two acts and will continue to monitor all activity that is relevant.  We want to assure you that we are doing everything possible to help you through these difficult times. The following narrative summarizes the two acts.


This act was brought about to help provide economic relief through the source of a relievable loan for businesses that are encountering difficult times during this economic disaster. In order to receive this loan, the business must be directly affected, offer services to a directly affected business or be indirectly harmed by losses in their communities. Once qualified, the business will then go through a screening process where it provides a variety of different financial items to determine the maximum loan it qualifies for. The calculation will be the lesser of 2.5 times the average monthly payroll from the year prior to applying for the loan or 10 million dollars. For example, if someone applied for a loan on March 31, 2020 the payroll information needed will be from March 31, 2019 – March 31, 2020. The money can only be used for fixed debts such as mortgage interest and rent, payroll and certain utility payments. The balance used will have a maximum interest rate of 4%, which will be the only payment the employer is responsible for if the funds are used properly and there are no layoffs. If the funds are not used properly there will be a calculation of the portion of the principal balance that will not be forgiven. Unforgiven balances will have to be repaid within 10 years. It will be very important to keep detailed records of the balance and the expenses that were deducted from the balance as the business will need to supply these expenses to verify they are in accordance with the rules. 

We do not know how long these loans will take to process, but they have implemented an emergency grant to provide $10,000 of the loan, immediately.

Other facts – employees with wages over $100,000 do not qualify, personal guarantees are required for loans over $200,000 and there are no costs to apply.


In addition to The Cares Act, the government has also implemented the Families First Coronavirus Response Act (FFCRA) to assist employees with paid leave, who are unable to continue to work due to the effects of COVID-19.  This act does not apply to all businesses. If a Company has less than 50 employees and can prove that the continuation of paid leave would jeopardize the viability of the business as a going concern, it does not need to comply. The FFCRA protects both full time and part time employees who have been employed by the Company for at least 30 days. There are six different ways an employee can qualify for paid leave under this act which will alter how much they are paid, either full wage or 2/3 wage, and how long they will be able to receive those benefits, 80 hours or 480 hours. Part time employees have prorations based on average hours for a two-week period, excluding unusually high or low work weeks. The Company will receive a dollar-for-dollar tax credit for all qualifying wages paid under FFCRA and will also receive tax credits for amounts incurred to maintain health insurance coverage. 

*Proceeds from The Cares Act can’t be used to pay leave under the FFCRA because the Company would be receiving a tax credit for the wages paid without using the Company’s funds. 

Other facts – the first 10 days of leave are unpaid but can be supplemented with accrued PTO, sick leave or vacation days and if an employee’s rate of pay is below minimum wage their hours are required to be raised to minimum wage.

We will help you however we can as you navigate this loan application process. Please call or email if you need help.

Please stay safe and healthy.

Best regards, 

The Mitz & Rozansky Team