CARES Act Paycheck Protection Program Available for Construction Firms


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By: Jennifer Creighton,

The CARES (Coronavirus Aid, Relie
f, and Economic Security) Act includes many potential relief opportunities for the nation’s construction industry, which has been hit hard with disrupted supply demand, delayed projects, closed sites, and labor shortages. The Paycheck Protection Program (PPP), a provision in the CARES Act, will help construction companies keep their workforce employed during the coronavirus crisis.  

Contractors and construction firms need to apply as soon as possible to benefit from the PPP. Funds will be granted on a first-come-first-serve basis and the Small Business Administration (SBA) expects to quickly distribute the $349 billion available for the program. 

Here are the things your construction company needs to know about the SBA’s Payment Protective Program to immediately take advantage of the program and help your business.  

Who Qualifies? 

  • 501(c)(3) non-profit organizations with fewer than 500 employees 
  • Small businesses with fewer than 500 employees 
  • Self-employed individuals 
  • Sole proprietors 
  • Independent contractors  
  • Tribal business concerns that meet the SBA size standard 

How Much Can I qualify For?  

The maximum loan amount will be 2.5 times your average monthly payroll expenses from 2019, up to $10 million. Payroll costs are capped at $100,000 annualized for each employee. 

When Can I Apply? 

Small businesses and sole proprietorships were allowed to start applying on April 3,2020. On April 10, 2020, independent contractors and self-employed individuals may begin applying.  

What Can I Use the Money On?  

  • Payroll costs including salary (up to an annual rate of $100,000)  
  • Wages 
  • Employee group health care benefits, including insurance premiums 
  • Retirement contributions 
  • Paid sick or medical leave 
  • Rent 
  • Leases 
  • Utilities 
  • Existing interest payments on mortgages 

How Do I Apply? 

You can apply through any existing SBA 7(a) lender or through any participating federally insured depository institution, federally insured credit union, or Farm Credit System institution. Visit to find participating financial institutions. Grants are available now through June 30, 2020 or until the funds are depleted.  

What Are the Repayment Terms?

If all employees are kept on the payroll for 8 weeks, the grant becomes forgiven at the end of the 8-week loan period. If you don’t meet requirements, the amount of your loan forgiven will be reduced. Any amount of the loan not forgiven will continue as a 2-year loan with a fixed interest rate of 1.0% and is 100% guaranteed by the SBA.  

Demand for the loans are expected to be high so for the full amount to be forgiven 75% of the loan will have to be used for payroll costs. 

What if I Have Other Debt or SBA Loans?  

You can still participate in the PPP even if you have another loan from the SBA or additional debt. 

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