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KPMG report: Lending programs under CARES Act, including interactions with tax provisions

KPMG report: Lending programs under CARES Act

The “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 116-136) signed into law on March 27, 2020—in addition to its numerous tax provisions—establishes two important lending programs:

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  • The Small Business Administration-administered “paycheck protection program” (PPP)
  • The Treasury Department’s economic stabilization fund

Together, these two programs provide nearly $900 billion to support lending to small and large businesses and to nonprofit organizations.

The PPP is available to tax-exempt organizations described in section 501(c)(3) and veterans organizations described in section 501(c)(19) that have no more than 500 employees. In addition, under a program to be established by the Federal Reserve for medium-sized businesses, Treasury’s economic stabilization fund will be used to support low-interest loans for organizations with between 500 and 10,000 employees, including nonprofits. These programs are intended to support employee retention and compensation. Read a KPMG report that outlines the requirements for the PPP, the economic stabilization fund, and the interaction of these programs with the tax provisions of the CARES Act.

Applications to obtain a PPP loan may be filed beginning tomorrow, April 3, 2020.


For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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