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CARES Act: Everything Independent Pharmacies Need to Know 

CARES Act: Everything Independent Pharmacies Need to Know PPP Loan Forgiveness

April 7, 2020

Inside: New loan programs put in place by the CARES Act will help your independent pharmacy weather the storm of COVID-19

On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The sweeping legislation allocates $2 trillion to help businesses and individuals recover from the economic devastation caused by COVID-19.

Small businesses like your independent pharmacy are poised to benefit from provisions in the legislation. Programs like payroll assistance, debt relief, emergency grants, and counseling can help ease the financial burden that has come along with coronavirus.

Read on to learn more about the relief you may be eligible for through the CARES Act.

Payroll Assistance

If you’re worried about paying your employees, there is an assistance program to help with payroll.

Paycheck Protection Program (PPP) Loans are federally guaranteed cashflow for employers to maintain payroll throughout the crisis. You can receive up to up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. Though they are technically loans, if you maintain payroll, the loans will be forgiven. Businesses can only apply for one PPP loan. The deadline is June 30.

These loans are intended to cover businesses harmed by COVID-19 between February 15 and June 30, and they can be applied retroactively in order to bring back workers you might have already had to lay off—but rehiring must be done quickly.

PPP loans don’t just cover salary and wages. The loan can also be used to cover:


You can also use this loan for non-payroll purposes like rent payments, utilities, interest payments on a mortgage. However, according to the US Department of the Treasury, “Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.”

It can’t be used to pay employee or owner salaries that are over $100,000 or to compensate employees who live outside of the United States.

In order to get forgiveness, you must apply with documentation on your payroll and documentation on any other payments you made with your PPP loan. If any amount of your PPP loan was not forgiven, you will have a term of two years, and the interest rate will be fixed at one percent. You can defer payments for six months to a year after the loan is disbursed.

Debt Relief

Pharmacies that financed their business with a loan backed by the U.S. Small Business Administration will get some relief from that debt under the CARES Act.

The Small Business Debt Relief Program will cover loan payments on SBA loans for six months, including principal, interest, and fees. This isn’t something you have to apply for—if you have an eligible loan, the SBA will make payments automatically for six months.

In particular, this program applies to businesses who have taken out these types of loans with the SBA:


The Small Business Debt Relief Program will also apply to new borrowers, so if you take out an eligible loan within six months of the bill being signed into law, you can also get relief.

Debt relief from this program will not apply if you also take out a PPP loan, and disaster loans are also not eligible for relief.

Disaster Loans and Emergency Relief

If your pharmacy business is experiencing a temporary loss of revenue due to COVID-19, you can apply for an Economic Injury Disaster Loan (EIDL), which is a low-interest loan of up to $2 million designed to help meet needs you could have paid for if the disaster had never occurred, like everyday operating expenses and payroll.

Once you apply, you can request an Emergency Economic Injury Grant. This is a $10,000 advance on your EIDL, and it will be dispensed within three days. It gives you super quick access to cash to cover the expenses you have right now, and because it’s a grant, you don’t have to pay any of it back. This program is available through December 31, 2020.

Because of the abundance of relief provided by the CARES Act, PPP loans and EIDL overlap in how they are applied. Here’s what you need to know about how they work together:


Professional Guidance

Pharmacies unsure of how to navigate their business decisions in this turbulent time can turn to local chapters of the Small Business Development Center, Women’s Business Center, and SCORE to receive free or low-cost guidance. The CARES Act allocates more funding to these organizations so they can offer free counseling and low-cost training to small business owners.

Small Business Development Centers are located in over 1,000 places across the country, including universities, colleges, state agencies, and with private partners. To find out about the counseling and training services provided in your state, visit the SBDC website.

Women-owned businesses can turn to the Women’s Business Center for one-on-one counseling, training, networking, workshops, technical assistance, and mentoring. These services are also extended to underserved business-owners, including low-income entrepreneurs. There are more than 100 WBCs across the country.

For free business advice and mentorship, pharmacy owners can turn to SCORE, a non-profit partner of the SBA. SCORE is made up of a network of more than 10,000 volunteer mentors and offers workshops in person at SCORE offices and online.

Visit the SBA’s website to find all the resources available to you. A new platform that lists all the information about COVID-19 resources is on the way.

To learn more about all the programs and initiatives for small businesses available through the CARES Act, read the Small Business Owner’s Guide to the CARES Act, assembled by the U.S. Senate Committee on Small Business & Entrepreneurship.


An Independently Owned Organization Serving Independent Pharmacies 

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The company is a member-owned organization that serves independent pharmacies with group purchasing services, expert contract negotiations, proprietary purchasing tools, distribution services, and more.

PBA Health, an HDA member, operates its own VAWD-certified warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products.

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