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As the coronavirus rages on, creating economic uncertainty, the federal government has been trying to soften the blow with loans and employee protections.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was passed unanimously by the Senate and signed into law by President Trump near the end of March, bringing $1.8 trillion in direct aid to individuals and businesses.

With so many businesses either temporarily closed, cutting down operations or furloughing their employees, the Paycheck Protection Program (PPP) had many business owners racing to apply for the forgivable loans administered by the U.S. Small Business Administration. (SBA).

On April 24 Trump signed $484 billion COVID-19 rescue bill, which included $310 billion in new money.

The White House announced that since May 3, 2.2 million small business loans worth $175 billion have been lent out during the second round of funding for the PPP.

PPP loans will be fully forgiven if the funds are used for payroll costs, rent, interest on mortgages and utilities. At least 75% of the forgiven amount has to be used for payroll, with the remainder on the other expenses.

To provide a safety cushion for normal operations to consume, loan payments will be deferred for six months. Collateral or personal guarantees are not required and neither government, nor lenders will charge small businesses any fees.

“It’s important for businesses to know that both the PPP as well as the Economic Injury Disaster Loan (EIDL) program help borrowers get capital now, and have a period — six months for PPP and 12 months for EIDL — before any payments have to be made, said Dawn Golik, SBA district director for Fresno. “It gives borrowers capital who are trying to stabilize and start to recover, and at that point they would begin making payments on the loan.”

EIDL is a loan of up to $2 million that carries a maturity of up to 30 years designed to support businesses through difficult times caused by disaster, such as the current pandemic. Specific loans will depend on the amount of economic injury a business has suffered, however.

Golik said it is also important to note that businesses may want to maximize the amount of loan forgiveness they can receive, and with a 1% interest rate, the repayment is affordable for businesses that do have a balance that has to be repaid.

PPP loans will have to be paid back within two years after the date they were distributed.

“The SBA is very appreciative of the local lenders that have stepped up to assist businesses at this really difficult time,” Golik said. “We’ve had a tremendous interest from our lending community around Kings County, the San Joaquin Valley and Central Coast region that want to use the PPP program to help small businesses, and we’ve added numerous PPP lenders from their local lending community.”

At Streamline CPA Accountancy Corp. located in Downtown Fresno, Adam Blitz, founder and CPA at the firm, said now that many businesses have received PPP loans, his biggest concern now is advising his clients on how to get the loans forgiven, especially with new legislation and the situation changing every day.

Blitz said that he is on the phone with his clients all day discussing the ways they are supposed to spend their money, as well as receiving countless client emails and text messages asking for assistance on how to use the loans.

Most of Blitz’s clients were left out of the first round of funding he said, but that 95% of his clients received funds during the second round.

Blitz said that this pandemic could prove to be a final show for some of his clients, and that they need to consider where the businesses could go from this point on.

“I’ve seen clients where this is a bridge to the end,” Blitz said. “They probably shouldn’t even take the money and just run. For some clients, if they take out their money and pay their employees, then what do they have at the end? If it doesn’t pick back up, especially in the restaurant and entertainment industry, I have a tough time seeing those as being viable enterprises in the short term.”

Blitz said that he has heard of clients not using PPP funding for payroll, and using it to fund other operations of the company to survive because it doesn’t make sense for them to be paying employees sitting at home.

“Just because you can get this funding, doesn’t mean it’s right. If you get this loan, that means you can’t get the employee retention credit, and maybe in your scenario, that was a better opportunity than a PPP loan.”