As the COVID-19 pandemic continues to weigh on the economy, additional resources have been made available to support small businesses during this difficult time. This article will cover some of the details of the program that have been improved or changed to provide additional financial resources.
Paycheque Protection Program (PPP) First and second draw PPP loans are available. The program is accepting applications until March 31, 2021 or until new funding runs out. The initial eligibility conditions are valid for a first PPP loan. If you received a PPP loan in 2020, you may be eligible for a second draw PPP loan.
A borrower is generally eligible for a second-draw PPP loan if the borrower:
Has already received a first draw PPP loan and will use or have used the full amount only for authorized purposes; has no more than 300 employees; and can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020
Expanded tax credit for employee retention:
The new law widened the eligibility of employers. Employers can now use these credits if they experienced a drop of more than 20% in the corresponding quarter compared to 2019 sales. The maximum amount of credit possibilities has also been significantly increased for the period starting on the 1st. January 2021 and will expire on June 30, 2021. If you have not taken advantage of these tax credits because you received a PPP loan, you are now able to use these credits. Small businesses that previously received the P3 loan can now use the Employee Retention Tax Credit, but they cannot use the same pay periods jointly. Consult with your accountant if you think you might qualify for these tax credits.
EIDL Grants: The new law reopens the $ 10,000 EIDL Advance Grant program. Priority eligibility for this program includes the following: Small businesses with up to 300 employees, located in low-income neighborhoods, that experienced a 30% reduction in their gross revenue in an 8-week period between March 2 and December 31, 2020, compared to a comparable 8-week period before March 2. If you meet this description and have received a grant of less than $ 10,000, you can reapply to receive the difference.
These are some of the major additions that increase the opportunities for small businesses to receive additional financial assistance at the federal level due to the COVID-19 pandemic. If you are still looking for other options, please contact the ASU-SBDC advisory team for more details on the programs listed above, as well as the ‘Grants for Operators of sites closed ”targeting small business and any current SBA borrower’s debt relief program. ASU-SBDC Certified Business Advisors have extensive knowledge of federal and local funding opportunities and programs; together, they have helped hundreds of small businesses in the region secure financing during the COVID-19 pandemic.
“Business Tips” was written by Dezaray Johnson, Business Development Training Coordinator, Angelo State University Small Business Development Center. For more information on the topic of this article or the services of ASU SBDC, contact her at Dezaray.Johnson@angelo.edu
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