A new coronavirus relief bill was passed by Congress and has been signed into law. If you run a small business, here are 15 things you need to know about it.
1. There is another round of PPP. Who is eligible?
The bill authorizes approximately $285 billion for another round of the Paycheck Protection Program that’s administered through the Small Business Administration’s (SBA) network of lenders.
However, this time the money is only going to small businesses (less than 300 employee per physical location) that have been specifically impacted by the pandemic. The criteria is that if your business has suffered revenue declines of more than 25 percent in any given quarter this year compared to last year then you will be eligible. The loans are up to $2 million and you can choose an 8 or 24-week forgiveness period. The loan calculation remains at 2.5x payroll and payroll costs for the period chosen unless you’re in the Accommodation and Food Services industry (NAICS Code 72) where you can use a 3.5x factor.
To be eligible for another round of PPP you must’ve used or will use the full amount of your first PPP, and, as mentioned above, you need to demonstrate at least a 25 percent reduction in gross receipts in the first, second, third or fourth quarter of 2020 relative to the same 2019 quarter. Borrowers who were not in business during the first, second, third quarter or fourth quarter of 2019 (January 1 – September 30), but were in business during the fourth quarter of 2019 (October 1 – December 31), can compare the first, second, or third quarter of 2020 (January 1 – September 30) to the fourth quarter of 2019.
In addition to the above requirements most businesses and certain non-profit organizations, housing cooperatives, news organizations, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives are eligible for the new PPP loans.
Ineligible entities include:
- entities involved in political and lobbying activities including engaging in advocacy in areas such as public policy or political strategy or otherwise describes itself as a think tank in any public document
- entities affiliated with entities in the People’s Republic of China
- registrants under the Foreign Agents Registration Act
- entities that receive a grant under the Shuttered Venue Operator Grant program (see below).
Publicly held companies are also excluded from this round. That’s also the case if your business or organization was not in operation on February 15, 2020.
ACTION: Run the numbers and if you’re eligible reach out to your SBA banker about getting a new loan.
Are you eligible for a PPP loan?
2. If you have an existing PPP loan, you can request an increase.
If your loan calculation has increased due to changes in interim final rules you are allowed to work with lenders to modify your loan value regardless of whether the loan has been fully disbursed.
ACTION: Run the numbers and if you’re eligible reach out to your SBA banker about increasing your existing PPP loan.
3. The definition of “forgivable” expenses has been expanded.
Forgivable expenses (those amounts that you can use to get forgiveness for your PPP loan) have traditionally included payroll, payroll-related expenses (including other employer-provided group insurance benefits such as group life, disability, vision, or dental insurance) and all rent and mortgage interest. All of those definitions still apply. But the definition of those expenses has been expanded to include the following:
- Operations expenditures such as payment for any software, cloud computing, and other human resources and accounting needs.
- Property damage costs such as costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
- Supplier costs such as expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.
- Worker protection expenditure such as personal protective equipment and adaptive investments to help you comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 between March 1, 2020 and the end of the national emergency declaration.
These definitions now also apply to loans made before, on, or after the date of enactment, including the forgiveness of the loan. The 60/40 cost allocation between payroll and non-payroll costs in order to receive full forgiveness will continue to apply.
ACTION: If you’re applying for a new loan, keep these expenses in mind when doing your loan availability calculations. If you’ve got an existing loan, then remember to apply all of these new expenses to ensure you get maximum forgiveness.
4. Forgiveness of PPP loans has been simplified.
There is now a simplified application process for loans under $150,000 so that a borrower can receive forgiveness if a borrower signs and submits to the lender a certification that is no more than one page in length, includes a description of the number of employees the borrower was able to retain because of the covered loan, the estimated total amount of the loan spent on payroll costs and the total loan amount. The borrower must also attest that they accurately provided the required certification and complied with Paycheck Protection Program loan.
The SBA may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. You still are required to retain relevant records related to employment for four years and other records for three years and your loan may still be audited if fraud is suspected.
Your requirement to restore your full-time employees and salaries and wages to previous levels before the pandemic has been extended. Your workforce has to be restored to its pre-February 15 levels on the last day of the Covered Period, which is defined as (A) beginning on the date of the origination of a covered loan; and (B) 8 or 24 weeks from origination. Your loan forgiveness may still be reduced based on the number of employees and employee salary that fell more than 25 percent.
ACTION: You’ve still got 10 months to apply for forgiveness after your forgiveness period ends so no need to rush. But if you’ve got a loan that’s less than $150K you might as well get this requirement out of the way to avoid any additional interest charges.
5. You can deduct your PPP forgiveness expenses.
This is a relief. Any expenses you use to apply for forgiveness are now also tax deductible to the extent otherwise tax deductible under existing law.
ACTION: No action. Enjoy the deduction and consult with your tax advisor.
6. If you’re a seasonal employer you’re more fully defined.
The new act defines a seasonal employer to be an eligible recipient which: (1) operates for no more than seven months in a year, or (2) earned no more than 1/3 of its receipts in any six months in the prior calendar and this definition applies to any loan made before, on or after enactment including the forgiveness of the loan.
ACTION: This should help you with determining your loan availability and your forgiveness calculation.
7. The EIDL program is alive and well and so are the grants.
Economic Injury Development Loans are still available directly through the SBA for all of 2021. $20 billion more has been allocated to the program. The $1,000 per employee grants are also still available but the SBA has been given more flexibility to verify that Emergency EIDL grant applicants have submitted accurate information and can now take up to 21 days to issue the grants. The good news is that you don’t have to deduct the amount of your EIDL grant from your PPP forgiveness amount. If you’re received a PPP loan then you’re likely able to also apply for an EIDL loan too.
In addition the new law makes entities in low and moderate income communities that received an EIDL Advance under eligible to receive an amount equal to the difference of what the entity received under the CARES Act and $10,000 because funding had run out and it also provides $10,000 grants to eligible applicants in low-income communities that did not secure grants.
A Low or Moderate Income Area (LMI) means a census tract as reported in the most recently completed decennial census published by the United States Bureau of the Census that has a poverty rate of at least 20 percent or in which the median family income does not exceed 50-80 percent of the greater of the statewide or metropolitan median family income.
ACTION: If you haven’t taken advantage of an EIDL, you should. They are long term (30 years) and interest rates are fixed at 3.75 percent which may seem like a bargain if interest goes up in the next few years.
8. If you’re in the Arts industry you are probably eligible for a grant under the new Shuttered Venue Operator Grant Program.
The new law authorizes $15 billion for the SBA to make grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives who demonstrate a 25 percent reduction in revenues with special amounts set aside for organizations with less than 50 full time employees. The SBA may make an initial grant of up to $10 million dollars to an eligible person or entity and a supplemental grant that is equal to 50 percent of the initial grant. The grants have to be used for specified expenses such as payroll costs, rent, utilities, and personal protective equipment.
In the initial 14-day period of implementation of the program, grants shall only be awarded to eligible entities that have faced 90 percent or greater revenue loss. In the 14-day period following the initial 14- day period, grants shall only be awarded to eligible entities that have faced 70 percent or greater revenue loss. After these two periods, grants shall be awarded to all other eligible entities.
ACTION: Keep an eye on sba.gov for where you can apply for your grant.
9. Additional support is being provided to businesses located in a “Low to Moderate Income Area”.
The law has created two set-asides ($15 billion for initial PPP loans and $25 billion for second PPP loans) for small business borrowers with 10 or fewer employees and businesses located in Low to Moderate Income (LMI) areas for loans up to $250,000. In addition, there are additional set-asides of $15 billion for small community banks, small credit unions, and small agricultural credit institutions, and $15 billion for mission-based community lenders like community development financial institutions (CDFIs), certified development companies (CDCs), minority depository institutions (MDIs), and SBA Microloan intermediaries.
ACTION: Find any of the institutions above and reach out to. Tell them you run a business located in a LMI.
10. Certain SBA Loans just became much more attractive.
If you already have an existing SBA Section 7(a) or 504 Microloan then you can get up to 8 months of forgiveness (3 months plus an additional 5 months if you’re in a hard hit industry such as food service and accommodation, arts, entertainment and recreation, education; and laundry and personal care services) of principal and interest payments – capped at $9,000 per month.
If you apply for a new SBA Section 7(a) or 504 Microloan and get approved before September 20, 2021 then your first six months of principal and interest (up to $9,000 per month) is also forgiven. You don’t have to show that you’ve been impacted by COVID-19.
To make life easier for bankers (and for you, the applicant), the SBA will increase its guarantees of these loans to 90 percent from 75 percent. Guarantee fees, which can be substantial, have also been waived. However, the SBA can change some of the terms of the loans depending on demand and funds available.
ACTION: You can save up to $54,000 of principal and interest payments on a new loan or $72,000 on an existing loan, depending on your industry. These are enormous savings and can finance your growth.
11. The Employee Retention Tax Credit has been expanded.
The Employee Retention Tax Credit has been extended to July 1, 2021. The credit rate was increased from 50 percent to 70 percent of qualified wages and the eligibility for the credit was extended by reducing the required year-over-year gross receipts decline from 50 percent to 20 percent and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility. In addition, the limit on per-employee creditable wages was increased from $10,000 for the year to $10,000 for each quarter.
The Employee Retention Tax Credit:
• Increases the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees.
• Allows certain public instrumentalities to claim the credit.
• Removes the 30-day wage limitation, allowing employers to, for example, claim the credit for bonus pay to essential workers.
• Allows businesses with 500 or fewer employees to advance the credit at any point during the quarter based on wages paid in the same quarter in a previous year.
• Provides rules to allow new employers who were not in existence for all or part of 2019 to be able to claim the credit.
• Clarifies the determination of gross receipts for certain tax exempt organizations.
• Clarifies that group health plan expenses can be considered qualified wages even when no other wages are paid to the employee, consistent with IRS guidance.
• Provides that employers who receive Paycheck Protection Program (PPP) loans may still qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds.
ACTION: This is a giant tax credit that you can take advantage of if your business has been affected by COVID-19.
12. Deferral of social security taxes has been extended.
You can now defer your employer’s share of social security taxes through March 2021 and pay those amounts back as late as the end of 2022.
ACTION: Extending these payments doesn’t relieve you of your obligations, but it does provide an interest free loan from the government. Talk to your accountant.
13. You can take advantage of the Employee Retention Tax Credit through 2026.
This credit, which can be up to $9,600 and can be applied against the taxes you owe if you hire certain long term unemployed workers, those on welfare and veterans has been extended for five years.
ACTION: This is another big tax credit for hiring a new employee. It will continue for another five years. Again, talk to your accountant about taking advantage of this before you make any new hires.
14. There is a bigger meal deduction.
You can now deduct 100 percent of your business meals that take place at a restaurant for 2021 and 2022.
ACTION: The government will give you a tax benefit by supporting restaurants. And if you’re a restaurant owner, let your business patrons know of this advantage too.
15. If you’re a nonprofit then you can get more donations.
The above-the-line charitable contribution is extended through 2021 at $600 for those married filing jointly and $300 for other filers. This means taxpayers will be able to take the standard deduction and deduct up to $600 in charitable giving when calculating their taxable income. For the 2020 tax year, taxpayers could deduct up to $300 above-the-line for charitable contributions.
Corporations can also continue to deduct 25 percent of their taxable income in 2021 instead of reverting to 10 percent. Also, the cap on the deductibility of food donations from corporations will stay at 25 percent of taxable income instead of reverting to 15 percent.
ACTION: This is a perk that every nonprofit should be using in their 2021 marketing.
The new bill has many benefits for your small business, regardless of if you’ve been impacted by COVID-19 or not. I know there are many concerns about the nation’s national debt and ongoing impact on deficits. But the money has been allocated and if you feel like your business could use the help, reach out for support.
Note: You should consult with your tax advisor for how these new rules may specifically impact your business.
Sources:
Text of the House Amendment to the Senate Amendment
The Economic Aid to Hard-Hit Small Businesses
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Be careful with your EIDL advice. Those loans have restrictions on how the proceeds can be used, and the SBA really failed to clarify this.
What banks in California are providing loans?
A full list of SBA lenders is here: https://www.sba.gov/funding-programs/loans/lender-match
There was no mention of the Covid medical leave of absence. Is that extended exactly the same way as 2020. We have 4-employees. With only 4-employees We’re only required to pay up to 10-days for employee illness only and not to take care of a sick family member or child at home. Correct?
The Families First Coronavirus Relief Act expired on 12/31/20. However it may be extended through September with a new stimulus bill so keep an eye out.
Very good info. I would love to receive more information.
Like a small business owner, it’s great to have information about the loan and the different programs. Really helpful.
Happy to help! So glad you enjoyed our article.
I am a small business 3 employees I am only able to provide 1099 for my staff at this time, I usually have salary deductions but since COVID I HAVE TO STOP am eligible for a SBA loan ?
Yes – you can apply for both a PPP and an economic injury disaster loan.
Great news. Great site to receive information. Thank you for the information.
I did receive a SBA of 12,000 dollars I also applied for a 15,000 grant and I was told that there were no more money for that program. I need to know how to get more help for my business.
The grants have been replenished and you can apply again. Priority is being given to minority owned businesses for the grants.
Excellent and thorough info that’s very relevant to my small business
This info is helpful, presented directly, formatted nicely
Thank you, very insightful
“The loan calculation remains at 2.5x payroll and payroll costs for the period chosen”
What is the definition of “the period chosen” Is it the period used during the first round or something new?
Under the new law most borrowers may receive 2.5 times the average total monthly payroll costs incurred or paid during the 1-year period before the date on which the loan is made or, at the election of the borrower, calendar year 2019. This amount may not exceed $2,000,000.
What a great resource. Thank you guys.
Has anything been made official about whether of not the forgiven amount is taxable and , if so, how is it handled for companies who have elected for Subchapter S?
Forgiven amounts are NOT taxable. And – thanks to the new bill – expenses you use to apply for forgiveness are deductible too.
Very helpful. Thank you.
What benefits are available for gyms?
You can apply for expanded federal unemployment benefits through your state. Otherwise you can reach out to an SBA lender and apply for a PPP loan using both 2019 and 2020 financials. If you’re interested you can also get an Economic Injury Disaster Loan directly from the SBA.
Good
Very informative
Thx
This is a great summary! There’s a lot here that I would like to learn more about for my small business. Will you be doing some other learning session?
Hi Erin! We are currently preparing a podcast recording as well. Glad the article has been helpful!
Thanks!
for small property owners who collect part of the rent from their tenants is there any help out there??
Thank you
You can apply for expanded federal unemployment benefits through your state. Otherwise you can reach out to an SBA lender and apply for a PPP loan using both 2019 and 2020 financials. If you’re interested you can also get an Economic Injury Disaster Loan directly from the SBA.
I own rental property and did not recieve any rent payments for 8 months while still making monthly payments to the bank. The tenant was protected by govt. regulations and could not be evicted . My property suffered damages that had to be fixed before I can rent it out again.Do I qualify for any assistance?
Your best bet is an economic injury disaster loan: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans
THANK YOU:-)
Great summary of important and timely info. Thanks
Hi,
I’m Helen the owner of Aunty Helen’s Kitchen which is a catering sole proprietor company. I have been doing almost all the work and only heading into covid was hitting the 5 year mark tipping point and getting employees for 1 event. Unfortunately, all my events were canceled because of covid.
Since I have no employees and probably back to doing most of everything myself can I qualify for any grants or loans since I have no employees? I have had nothing since June.
Thank You
Helen Gain
Aunty Helen’s Kitchen
702-901-2602
auntyhelenskitchen@gmail.com
auntyhelenskitchen.com
You can apply for expanded federal unemployment benefits through your state. Otherwise you can reach out to an SBA lender and apply for a PPP loan using both 2019 and 2020 financials. If you’re interested you can also get an Economic Injury Disaster Loan directly from the SBA.
Thank you for the information
Thank you from Music and Art Academy.
The PPP loan earlier in the year helped save my business and kept my employees that wanted to work, working. I appreciate the help. I own a restaurant and sports bar.
The information helps so much going to try to get help because banks and others don’t have the information.
Thanks for the information we could all use this.
Thank you for the comment Wardice!
Who is preferred lenders for these programs?
A list of SBA lenders are here: https://www.sba.gov/funding-programs/loans/lender-match
Super
I was approved for a loan through the SBA. Due to the SBA not interacting with my bank I just left it alone. I had all kinds of trouble such as not being able to enter the Portal. I still have my application information. I have been closed for over a year now.
These are very helpful Thanks for doing this
Thank you!
My Plumbing Business, Greg Bulifant Plumbing & Heating is down 84 percent. We only have 1 employee. What do I qualify for. Grants? PPP?
You would definitely qualify for a PPP loan (go to an SBA lender)
You can also qualify for an economic injury disaster loan – https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loans
How to apply for free grant for per employees
Thank you
Try here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans
When can we apply for the small business grant and loans through SBA
PPP loans are through an SBA lender: https://www.sba.gov/funding-programs/loans/lender-match
EIDL and grants are here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loans
I became a small New Jersey business owner (sole proprietor) October 2019.
I leased a store November 1st, 2019. The store closed March 15th, 2020 because the store building was ordered to close. The store has remained closed. Am I entitled to any stimulus monies?
Thank You ..
Yes. You should apply.
Very helpful
Thanks
Would you explain the SBA section 7(a)?
A Section 7(a) loan – which is received through an SBA lender – is a loan that can be used for working capital, equipment, inventory and business acquisitions. You can borrow up to $5 million at both fixed and variable interest rates as long as you have less than 500 employees and less than $7.5 million in average annual receipts. You also have to be a for-profit business, based in the U.S. and not be delinquent on any debt owed to the government. Depending on what you intend to use the funds for your maturities would be between 7-25 years.
So this, 7(a) will then have the first 6 months forgiven?
I am looking to get a loan or grant ( people are mentioning grants, but not seeing this part) to help our biz that lost our production kitchen. We chose the unemployment route, over ppp and now are considering eidl or 7a to help us figure out a new space. With little collateral.. We are in the rural , low income, woman minority category. Is there more coming out to help this sector outside ppp? Your post is very helpful. Thanks! ( sorry I am out of line, I wasn’t able to post any other way, and I have an involved question!)
Since I wrote this, the forgiveness period has been reduced to 3 months!! So you should act fast. Definitely apply for 7a or 504. Talk to an SBA lender.
I started a small woman-owned woodworking business at the beginning of the pandemic. I’m making fine furniture but I’m struggling. I’m wondering if I can take advantage of any of these programs given I don’t have a history of revenue prior to April of this year? Are there any relief programs out there to help a small business like mine? Thanks for the help!
Unfortunately for PPP you have to have been in existence before Feb 15 of this year. You can try for an economic injury disaster loan from the SBA but they’re giving priority to existing businesses. Because you’re woman-owned you should also look for financing at for small community banks, small credit unions, and small agricultural credit institutions, and $15 billion for mission-based community lenders like community development financial institutions (CDFIs), certified development companies (CDCs), minority depository institutions (MDIs), and SBA Microloan intermediaries.
Thank you
Excellent breakdown! I’m sharing it across all my wires.
Thank you Sherri!
Great outline of the new PPP
Thanks for these updates!
Will PPP loans under 50,000 be forgiven?
When will we start the PPP forgiveness paper work
The SBA is putting together final guidelines but we are advising our clients to get the process underway as soon as they’re ready. You have 10 months to apply for forgiveness after your 8 or 24 week period ends.
Re #9 for additional support for minority owned business with less than 10 employees. I’m a woman and own our business with my daughter. Are women owned included in this minority?
Yes. But the additional loans are targeted to businesses in Low and Moderate Income areas. Ask your banker. Also, there are additional set-asides of $15 billion for small community banks, small credit unions, and small agricultural credit institutions, and $15 billion for mission-based community lenders like community development financial institutions (CDFIs), certified development companies (CDCs), minority depository institutions (MDIs), and SBA Microloan intermediaries.
How does one find out about these additional set asides! could these come in the form of loans And grants, given out by ‘mission based community lenders’? I called some in my area, and no one knew anything beyond ppp.
That’s the problem: many of these lenders aren’t up to speed on the rules. Try out the SBA’s list of approved lenders here: https://www.sba.gov/partners/lenders/microloan-program/list-lenders
Excellent info and first one to be out with the info.
Very helpful and being a customer of Hartford Insurance for many years shows that the company cares for its customers and I appreciate the info and look forward to more notification.
Thank you.
So glad this article was helpful to you! Thank you for your comment Morley!
Thank you for the information.
I appreciate it and would appreciate follow-ups.
Hi, what is available for new business owners of six months during pandemic without a salary yet?? Thank you.
PPP is not available for businesses that started after Feb 15, 2020. EIDL may be available but it will be a challenge if you have no historical financials to show. You should apply for an EIDL directly with the SBA here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loans
I thought EIDL’s were only 12 month terms (with a 6 month extension). 30 years?
Yes, they are 30 years.
Your information is very good for us. Thanks
I am a professional Musician, Touring and Recording Artist. I have been performing, composing, recording etc… live, film and TV, Software Programs etc… wherever music is needed I have been blessed over the years to provide it! Who do I contact in regards to recieving the help I need from this Bill?
You can apply for expanded federal unemployment benefits through your state. Otherwise you can reach out to an SBA lender and apply for a PPP loan using both 2019 and 2020 financials. If you’re interested you can also get an Economic Injury Disaster Loan directly from the SBA. https://www.sba.gov/funding-programs/loans/lender-match
I don’t see any money for the self employed with no employees . We were hit just as hard . have payments to make . Bills keep coming in . I am a small car rental . People are not traveling .
You can apply for expanded federal unemployment benefits through your state. Otherwise you can reach out to an SBA lender and apply for a PPP loan using both 2019 and 2020 financials. https://www.sba.gov/funding-programs/loans/lender-match
My business took a hit because of the pandemic to where My credit is messed up and I know longer have a bank account can I still qualify for a pp loan my business did over 250 k last year and nothing this year.
It’s possible if you can provide the documentation to support this. You need to reach out to an SBA lender ASAP and go through the numbers: https://www.sba.gov/funding-programs/loans/lender-match
thank you for the summary
Thanks for the info!
Please keep posting to reflect the date for applying for the loan.
love this it is the most information I have gotten
This information is very helpful and very much appreciated.
Lain Lee
President
Railcar Quality Services, Inc.
Thank you for your help.
We really need all the help we can get in the pharmacy business.
Thanks
My husband is self employed and partners with my son. Since we open the business we had been trying to stay afloat and payroll is not a luxury they can afford. So after paying bills and rent they write a check on their name. We file taxes and we do have a business registration and tax ID. How I can see if this business can continue? How can I qualify for government help or who I can ask for help?
The payroll used for loan eligibility is based on your “Schedule C” income. Look at what that was for 2019 and use that.
Thank you so much for helping the small businesses stay in the loop.
Thank you for the kind comment!
how a self employed person can apply? what are the steps?
thanks
If you’re self-employed you should decide between applying for continued unemployment benefits or going for a PPP loan. If you do the PPP route you’ll need to apply through a bank or online lender.
Thank you!
This article is not inclusive of the EIDL full grant details. Grantees that did not receive the full 10k amount the first round will now receive the balance owed there of.
That is correct and I’m updating this piece to include. Thanks.
So informative, Clearly presented.
My bank doesn’t do SBA loans. And if you dont have existing accounts it’s hard to find help. Any ideas?
Yes, there are plenty of lenders who will work with you even if you don’t have an account.
https://www.sba.gov/partners/lenders/microloan-program/list-lenders
Thank you for doing the research and making a concise list of the points for small businesses. I am an LLC that started at the first of 2020 and I have no employees; so, I cannot take advantage of most of the points. The charitable contributions being “above the line”, however, is news. Does that apply to individuals? Is the $600/$300 limit for EACH non-profit organization supported; or, is it a TOTAL for all non-profit contributions?
It’s a total for all non-profits. Also, if you started your business before Feb 15 2020 you would still be eligible for benefits.
We received a PPP in round one and it is near the 150k limit. If we receive PPP in this round and it is added to the first, it may put me over the 150k threshold. Is there guidance on if this is a 2nd loan or an add on to the original loan?
Each loan is considered separately so you should be fine.
Happy New Year to everyone! I had been selling commercial advertising, going from business to business (my company name is Ethnic Marketing Group). Due to Covid-19 I couldn’t conduct any business for more that a year. Can I count on Grant from SBA or elsewhere not on a loan?
Your response is greatly appreciated. Best wishes, Sophia R.
If you have employees, try for a paycheck protection loan. Also consider applying for an economic injury disaster loan. If you don’t have employees you should apply for unemployment insurance.
Thank you for the information
You’re welcome, Jack!
Very good information. Thank you…
Thank you, Carolyn! Glad you found the article informative.
Very helpful information. Thanks
Glad you found it helpful!
Thank you for this information on the new stimulus packages. I truly appreciated being kept in this loop.
You’re welcome, Dotti! Glad you enjoyed the article.
Unfortunately my small business first opened on March 17, 2020 and we were directly impacted by COVID-19 when we had to close down a week later due to state and local shelter-in-place orders. Long story short, I was unable to apply for the first round of PPP and EIDL because we were not in business by the cut-off date of Feb 15, 2020. I see that this second round also has that same cut-off date. Is there anything in this new act that can help my struggling business? Thank you in advance!
Unfortunately there is no assistance to businesses that began operations after Feb 15, 2020.
Such a great article, thank you! Can you provide more guidance on #4? Is there a sample certification letter, or letter outline, available that can be used for PPP forgiveness?
Thanks and you can get that directly from your SBA lender. They should have it in their hands by now.
How do we find out if we are in Low Income area?
You should talk to your lender – they will have this data.
This site can help you. Just plug in your business address. It will show Census Demographic Data:
https://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspx
However, it may not come up on your browser. If not, just Google geocoding system and select the site that comes up with “Federal Financial Institutions”.
Thanks for the help. Very informative.
Glad it was helpful, Harold!
This is really good information.
We have LLC started in 2018 with no employees and am the only one work and manage it.could you please suggest what am
Eligible for? Appreciate your reply.
I would suggest you consider unemployment. It’s open for sole proprietors and independent contractors.
Where is the documentation for this option? Does this mean we can still defer? This is confusing and I have not been able to find any guidance on this.
12. Deferral of social security taxes has been extended.
You can now defer your employer’s share of social security taxes through March 2021 and pay those amounts back as late as the end of 2022.
ACTION: Extending these payments doesn’t relieve you of your obligations, but it does provide an interest free loan from the government. Talk to your accountant.
You can find more information here: https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020
Where can I find information on the extension of the social security tax deferral? I am not seeing that anywhere else and my payroll provider is not allowing me the option to continue to defer those taxes.
Hi Rachel, you can use this as a guideline. It will be updated shortly.
https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020
This is also a good reference:
https://tax.thomsonreuters.com/blog/a-run-through-of-the-payroll-related-provisions-of-the-latest-covid-19-law/
Gene, great article. I am looking for some guidance on increasing my original loan. I received about half of what I could have received. However, Chase is playing dumb and not really helping me get the original amount increased. I don’t think I can show an 25% decrease quarter to quarter to get a second loan. I am referencing the following summary:
2. If you have an existing PPP loan, you can request an increase.
If your loan calculation has increased due to changes in interim final rules you are allowed to work with lenders to modify your loan value regardless of whether the loan has been fully disbursed.
Any assistance or guidance on how to get Chase to help me get an increase on my original loan would be appreciated. Thx. Mac
This matter was left to be resolved by the lenders, unfortunately. Which means you’ve got to aggressively go after an adjustment with Chase directly. This article may also be useful: https://www.natlawreview.com/article/paycheck-protection-program-sba-issues-guidance-first-draw-and-second-draw-ppp-loans
What loans are available for the real estate industry? As an owner of multi family apartments are there any loans available?
Yes, either Paycheck Protection or Economic Injury Disaster Loans. Thanks for reaching out!
Could you tell me where you found the information on the extension of the social security tax deferral? I am having a hard time locating that information and my payroll provider isn’t offering the option like they did last year.
Hi Rachel, these are two good sources:
https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020
https://tax.thomsonreuters.com/blog/a-run-through-of-the-payroll-related-provisions-of-the-latest-covid-19-law/
Thanks for commenting!
Gene, great article. I am looking for some documentation on how to increase the amount of my first PPP loan per your second point in the article. My bank has no idea how to request an increase to my existing loan. We do not qualify for a 2nd PPP loan. Any guidance would be appreciated. Thanks in advance.
Hi Robert, I’d love to help you but this is on your bank. They need to contact the SBA so that they can get the documentation they need.
We own a small IT company with a few employees, and based on the second point in the article we are looking for some guidance on how to increase the amount of our first PPP loan. We definitely qualify for a larger amount than we first received but we do not qualify for a second loan because we can only show a 20% decrease quarter over quarter. We have been unable to find any reference in published guidance from the SBA on how to do this. Any help you can give us is appreciated!
Hi Debbie, your best bet is to go back to your lender and ask them for an increase. They should have the documentation/guidance they need from the SBA to do this.
Thank you for all the advice. When calculating the gross receipts for the 25% reduction from 2019Q to 2020Q must I also include any unemployment benefits received? Thank you!!
No you don’t need to include unemployment benefits received. Thanks for reaching out!
We had plans to open a new restaurant location in West Virginia in the first quarter of 2020 when the pandemic hit. As a result, we delayed and struggled, but pulled it together and opened in July of 2020. We obviously have been hit very hard by COVID and continue to do so. It seems because we weren’t officially open by 2/15/20, we miss all the of the PPP, EIBDL, etc relief that is out there. Seems like the government should consider redefining eligible businesses. All businesses that have opened the last 10 months are left out of any relief efforts. Am I missing a way to be eligible for relief or any chance they are going to re-consider eligibility?
Hi Jason, unfortunately you would have had to been in operation by 2/15/20. However, you should consider an SBA Economic Injury Disaster Loan. It’s not forgivable but it’s helpful.
This is a great write-up. Thank you for putting it together. Two follow-up questions for you:
1) Can the amounts be modified for the second round of PPP loans after they’ve been issued (like the first round)?
2) Can a company apply for EIDL grants a second time?
We’re glad you liked the article! Here are responses to you questions:
1 – It’s unlikely as the rules won’t be changed that significantly.
2 – Unfortunately no
I agree that the section stating “You can now defer your employer’s share of social security taxes through March 2021” is confusing and misleading and it would be helpful if it were restated more clearly. I believe that the employer’s share of social security taxes may only be deferred if they were incurred through 12/31/20. However, the payment of those 2020 taxes is now delayed to as late as 2022. Please confirm this is correct.
Hi Beth, you can extend 50% of the payment to the end of 2021 with the remainder due by the end of 2022.
Can you please clarify? Isn’t this the Workforce Opportunity Tax Credit rather than the Employee Retention Tax Credit?
13. You can take advantage of the Employee Retention Tax Credit through 2026.
This credit, which can be up to $9,600 and can be applied against the taxes you owe if you hire certain long term unemployed workers, those on welfare and veterans has been extended for five years.
ACTION: This is another big tax credit for hiring a new employee. It will continue for another five years. Again, talk to your accountant about taking advantage of this before you make any new hires.
Hi Kelly, thanks for commenting!
The workforce opportunity tax credit is SEPARATE from the employee retention tax credit. They are two separate credits requiring two separate calculations. You should consider them both.
I purchased an existing restaurant on October 26, 2020. Previous ownership applied for and received a PPP loan from first stimulus. Am I eligible to receive a PPP loan?
Yes you are! The entity was in existence before Feb. 2020.
We are a fitness center/gym that opened August 17, 2020. Are there any programs that we qualify for? What is a new business to do when we are forced to a manditory shutdown by our governor? We have 8 employees…4 full time and 4 part time.
Hi Jennifer, thanks for the comment!
PPP unfortunately is not applicable for you. However you should apply for a EIDL
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans
You can also look for local/state/city grants that may be available for small businesses.
I thought EIDL had the same cut- off dates for new businesses as PPP. Is this not corrrct?
Nope, the program is available until 12/31/21.
Sorry I guess I should have been more specific. My understanding is that unless you were in business before 2/15/20 you do not qualify for EIDL or PPP. My business started 3/17/20.
I am a minority business owner and interested in EIDL minority loan with less than 10 employees. What would be the best EIDL program out there? I know there is 175 Billion small business EIDL package from coming stimulus deal. Am I qualified to get this EIDL even if my business is not located in low to moderate income area since I am a minority business owner? Or your business must located in low to moderate income area?
For more information, you can visit this website: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans
Here, you can look for loans targeting low to moderate income businesses. You can also apply for targeted grants.