Small business stimulus and what you need to know
As a quick review, small business owners need to know what to expect in 2021. Here is an overview of the business stimulus plan.
- A new round of Paycheck Protection Program (PPP) loans
- More permissive rules on deducting expenses that were paid with PPP Loan funds
- The opportunity for a second PPP loan for certain businesses
- Simplified PPP Forgiveness application
- Expansion of PPP-covered expenses
- Reopening the Economic Injury Disaster Loan (EIDL) program. This is great news for many business owners.
- EIDL reconsideration continuance
- Deductible expenses paid with EIDL advances and the advances not getting offset from a PPP loan
- An expanded Employee Retention Credit (ERC)
- More loan money for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs)
- Extended payroll tax deferral
- Full business meals deductions in 2021 and 2022
- Additional grants for live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators or talent representatives. This is completely new to many people in this industry.
Second chance for Small business stimulus
In 2020, many businesses benefited from the stimulus. Indeed, many were discouraged because they got denied. This presents a new opportunity for those businesses who were denied. By and large, this is also great new for those businesses who obtained funding. Understanding the new stimulus bill could make the difference between whether your company survives the pandemic or not.
Obtain more information on stimulus for small business owners at: 888-505-5835
Is the SBA Approving Economic Injury Disaster Loans (EIDLs)? Patience
First, you need to understand that the SBA continues to be backed up in processing loan applications. As a result, you need to have patience. The wait is worthwhile. Unlike other business loans, the EIDL has a 30-year repayment term. In addition to this, it has the lowest rate in comparison to any business loan in the marketplace. Patience is needed in this process.
As of January of 2021, we are still waiting for the new guidelines. The SBA has 10 days from the passing of the bill to issue regulations, and 24 days to come up with the simplified forgiveness for those loans under $150,000. Without a doubt, by the end of January of 2021 we will all know the final guidelines. Clearly, many business are anxious to obtain capital. At this time many answers to some questions remain uncertain.
Submit your application for review today. Click here
What to do at this time?
Before applying, get organized. Notably, many businesses did not obtain financing because they did not have their paperwork in order. For this reason, included are a few tips to make sure you can obtain PPP or EIDL funding:
- Have your payroll ledgers in order
- File your 940s or 941 forms
- Make sure that you did not take a loss between 2019 and 2020
- Also, if you have a loss and have filed taxes, make some adjustments
- Without a doubt, you will be better off paying taxes as oppose to not obtaining financing
- Obtain a tax extension
- Last but not least, have profit to loss statements ready
Consider Interim Financing
Apart from EIDL or PPP financing, look into interim financing. While you wait you can obtain other forms of capital for your business. Certainly, this may help you keep your business running until you obtain government funding. In fact, many businesses in 2020 utilized this strategy while they waited for their small business stimulus package. Although, the cost of capital may be higher it’s worth keeping your doors open.
In summary, the good news is that there is more stimulus for small business owners on its way.