Small businesses may be eligible for a variety of loan/aid offerings…
There are currently 5 types of funding/credit that taxpayers have access to; Paycheck Protection Program, SBA Economic Injury Disaster, Employee Retention Credit, Florida Bridge Loan & SBA Express Bridge Loan.
Paycheck Protection Program
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for expenses including payroll, rent, mortgage interest, or utilities.
- Who is eligible? All businesses with less than 500 employees who in, “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.”
- How much? 125% of 8 weeks payroll with a maximum payout of $10 million
- Term of loan? 2 years with payment deferral for first 6 months
- Interest Rate? 0.5%
- Loan forgiveness? Yes. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll)
- How to apply? Applicants can apply through the SBA website or through local banks
READ SBA NEWSROOM PRESS RELEASE
Economic Injury Disaster Loans and Loan Advance
The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- Who is eligible? All businesses with less than 500 employees in any federally declared disaster area (all 50 states for COVID-19)
- How much? Maximum of $2 million
- Term of loan? Up to 30 years
- Interest Rate? Max 3.75%
- Loan forgiveness? No
- How to apply? Through SBA website
READ SBA SMALL BUSINESS GUIDANCE
Employee Retention Credit
Overview – The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees
- Who is eligible? All businesses that fully/partially suspend operations during 2020 due to COVID-19 or businesses which experience a significant decline in gross receipts
- How much? $5,000 credit per employee per quarter
- Term of loan? NA
- Interest Rate? NA
- Loan forgiveness? NA
- How to apply? Through Form 941. Payroll companies will likely assist but we may need to assist clients who file their own payroll
- Timeline for approval? No guidance but IRS advise funds can be advanced
READ IRS EMPLOYEE RETENTION CREDIT
In addition, the following bridge loans are available:
· Florida Bridge Loan – $50k interest free, one year loan
· SBA Express Bridge Loan – $25k, fast turnaround
