Bailing Out Of Confusion: A Closer Look At the CARES Act

By Jamil Shabazz

Ball of confusion, that’s the world we live in today. The Coronavirus has infected our day-to-day routines. Everything that was familiar has been upended, replaced with muddling uncertainty. Essential to our routine are the products and services that we consume. From restaurants and gyms, to beauty salons and magazines, all businesses are struggling in the current economic climate. However, small businesses are being hit the hardest. To combat record unemployment and economic devastation congress deployed The CARES Act – Coronavirus Aid, Relief, and Economic Security Act. The act was engineered to simulate the economy by allocating funds for large and small businesses, airlines, and individuals. The CARES Act provides economic relief to businesses under three main programs: Paycheck Protection Program (PPP) Loans, Small Business Debt Relief Program and Economic Injury Disaster Loans.

The Paycheck Protection Program, the centerpiece of the CARES Act was supposed to provide small businesses assistance through 100 percent federally guaranteed loans and loan forgiveness. The reality of the PPP has been the epitome of a good idea executed poorly. A complex web of red tape and vaguely written legislation caused the PPP to run out of funds a month after being passed. It has come to light that the PPP has distributed $300-500 million in loans to large, publicly traded companies, diverting funds from legitimate small businesses. Additionally Republicans slipped a tax change into the CARES Act, for which 82 percent of the benefits will go to people making more than $1 million annually. That change will cost taxpayers $90 billion in 2020. 

Colorado Coronavirus Economic Efforts 

“In doing our research we discovered that 75% of the (PPP) applications that are submitted are done incorrectly. When it comes to applying for the program we took that process seriously and we want to do it right, the first time,” said small business owners Joslyn & Brittney Rae Reese shortly after livestreaming a midday dance break on Facebook. 

Sisters Joslyn & Brittney Rae own FIT & NU a habit-based fitness and nutrition company for women of color in Aurora, Colorado. The duo holds a unique niche in the fitness and nutrition market, in the regard that their company was founded by and serves women of color. 










“Not wanting to rely on PPP alone, we’ve also been applying for small business grants that cater to women of color. In addition we’ve been working closely with the Mile High United Way in their small business advisory program, and that program has been such a blessing at a time like this.”

The state of Colorado has been resilient and unyielding in their efforts to assist members of the community during this crisis. The Mile High United Way has been instrumental in helping businesses during these unprecedented times assisting with oversight for the Colorado COVID Relief Fund and collaborating with the city of Denver and the Downtown Denver Partnership to distribute the cash grants and microloans. While Denver native and Vista Equity Partners Chairman Robert F. Smith developed COVID-19 Small Business Loan Accelerator, leveraging his company’s Quick Base software to help small and minority businesses accurately prepare PPP loan application documents

The City and County of Denver is helping to support Denver business owners when it rolled out a $4 million COVID-19 relief fund in March to provide support to the following areas:

Denver Economic Development and Opportunity (DEDO) is setting up an emergency relief program to provide cash grants up to $7,500 to qualifying small businesses.

CEDS Finance has refocused an existing microloan program to support small businesses’ stabilization efforts.

IMAGINE 2020 Artist Assistance Fund; Denver Arts & Venues (DAV) is awarding grants up to $1,000 to individual artists who live in Denver.

El Pomar Foundation announced the establishment of the Colorado Assistance Fund (CAF). CAF is a $1 million fund offering immediate aid to nonprofit organizations supporting Colorado communities.

The COVID-19 CO Creatives Relief Grant is a one-time payment to non-profit arts organizations in Colorado with an annual operating budget of less than $1 million.

CARES Act Phase 3.5 – More Economic Relief On The Horizon

On April 21, 2020, a $484 billion coronavirus relief bill was passed by the Senate. If approved by the House of Representatives and signed into law, the bill would amend the CARES Act and replenish Paycheck Protection Program (PPP).

A few key points of the bill:

Expand the authorization level for the Paycheck Protection Program from $349 billion to $659 billion.

Increase the appropriation level for the Paycheck Protection Program from $349 billion to $670.335 billion.

Increase the authorization level for the Emergency Economic Injury Disaster (EIDL) Grants from $10 billion to $20 billion.

Create a set-aside for Insured Depository Institutions, Credit Unions, and Community Financial Institutions for the PPP. Community Financial Institutions are defined as minority depository institutions, certified development companies, microloan intermediaries, and state or federal /credit unions.