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5by5 recently completed a research study of business and nonprofit leaders to assess their needs right now. As a result, we’ve created the State of Change series to address those needs.

Two-thirds of respondents told us that maintaining income was their number one concern. The CARES Act provides critical financial relief that you should be aware of. There are a lot of questions about the CARES Act, and we wanted to help provide some answers. 



Who is impacted by the small business options included in the CARES Act?

Anyone who owns a business with 500 or fewer employees, is a member of an LLC, is a pastor of a church, runs a Nonprofit, has employees or even if you don’t have employees. Essentially, anyone in business.



What is the CARES Act?

The CARES Act was passed by Congress last week as an economic package to aid individuals and businesses impacted by COVID-19. This Act, along with existing Disaster assistance through the SBA, provides two significant options that small businesses (and others detailed above) should become familiar with. These include Economic Injury Disaster Loan (EIDL) and Pay Check Protection Program (PPP) – both detailed more below.



So now what?

Below is a detailed Five-Point Initiative, breaking down the high-level pieces that will be critical for small business owners and nonprofits who want to take advantage of the CARES Act.

This information was researched, collected and provided by 5by5’s trusted attorney, Kurt Beasley, JD, CPA, at Waterford Law.


1. Assembling of financial records

  • In preparation for filing the SBA Disaster Assistance Loan Application (EIDL) & the Pay Check Protection Program (PPP) Loan Application, begin to assemble your records.
  • The list of requirements as to what is needed at this time includes:
    1. 2019 financials
    2. Jan – Feb 2020 financials
    3. Gross revenue and cost of goods 2/1/19 – 1/31/20
    4. Payroll records 2019 – 2020
    5. Additional payroll information to calculate Average Monthly Payroll
  • To Calculate Average Monthly Payroll:
    1. Total Payroll for 2019 (do not include any employee earning $100,000 or more)
    2. Total Employee Benefits Cost (retirement, vacation, medical, health care costs)(includes all employees)
    3. Related State & Local taxes regarding payroll (includes all employees)
    4. Total Number of Employees earning $100,000 or more for 2019


2. SBA Disaster Assistance Loan (EIDL)

  • Seeking low interest loan for operations and an additional forgivable $10,000 advance
  • We have developed a process of analyzing your financial records, compiling, preparing and filing the SBA Loan Application.


3. Application for the CARES ACT: Pay Check Protection Program (PPP)

  • If you have assembled the suggested financial records and proceeded to file the SBA Disaster Assistance Loan Application, you are poised to proceed to complete the PPP Application.
  • Filing the PPP Application will be accomplished in conjunction with your SBA Lender. We are in contact with SBA lenders and preparing to facilitate the loan submission process.


4. Analysis and Short-Term Business Plan Objectives

  • What do I do in the short-term? How do I best position my organization to take advantage of these government assistance programs and at the same time stay engaged in moving forward.
  • Example: Do I layoff, furlough, or maintain my current staff? How can my employees receive the maximum benefits afforded to them and at the same time operate my organization in an efficient and prudent manner?
  • How should I navigate the inherent conflict in determining what is the best interests of all involved, the organization and its employees?


5. Responsibilities after the acceptance and receipt of the PPP Loan 

  • Ongoing Monitoring of Expenditures for Loan Forgiveness Reporting, Strategy & Compliance
  • To receive maximum forgiveness of your PPP loan, it is imperative that your reporting systems be able to support and respond to the SBA’s guidelines. The rules are complex and open to a wide range of interpretation.


Final Thoughts

Friends – This is a challenging time. Before making significant and future-altering decisions, please be sure you are aware of all of your options. There are options today that didn’t exist just one week ago. Start with the links below. Seek counsel with trusted advisors. We need mission-driven organizations to be stronger than ever as we beat this pandemic.

Remember, if your mission mattered a month ago, it will matter in a few months, and a year, and a decade. We’re all in this together. Let me know if we can help.

Shannon Litton

5by5 CEO and President


Important Links:

There is a lot of information available. This is the best summary with critical details that we have found, and is provided by the U.S. Senate Committee on Small Business and Entrepreneurship.


We presented all of this information and had further discussion on many of the points in our webinar, The CARES Act fort Small Businesses and Nonprofits. You can register and watch that webinar on-demand now.


In response to what so many of you told us in the research project, we’re working hard to get you what you need. We are creating the State of Change series, which includes practical resources, tools and information to help you and your organization navigate this uncertain time.

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