Apply for the Paycheck Protection Program with an eligible lender
A person filling application form. Apply for the Paycheck Protection Program with an eligible lender
It might seem that the financial panic created by COVID is easing, but don't forget that there are still some important financial benefits available to small businesses affected by the pandemic. Here are three:
PPP Loans: If you haven't received a Paycheck Protection Program loan for 2021, you still have time. The SBA is accepting applications until May 31 for the current iteration of the program. As long as you follow the rules, the PPP loans are almost always forgiven, so don't worry about adding debt to your balance sheet. How to start? First, inquire at your own bank. Sometimes that is the fastest way to get the loan, because they already know you and your business. But if that doesn't work, check out one of the many online banks offering the loans, such as Lendio or Womply.
Economic Injury Disaster Loans: The EIDL program helps small businesses that suffered from COVID. The loans are not forgivable, but the interest rate is only 3.75% over 30 years. Some small businesses that received EIDL money in 2020 got a letter from the IRS telling them that the program has increased the maximum amount to $500,000 and the "economic injury" period to 24 months. The letter informed them that they could apply for an additional loan based on the new rules. The first payments are not due until 18 months after the note date. For more information and to apply, click here.
COVID Tax Credits: If your business is still down at least 20 percent from where it was in 2019, and you kept your employees on the payroll, you may be eligible for some generous tax credits from the IRS. You can get a tax credit against the employer portion of the Social Security tax equal to 70 percent of your payroll for the first two quarters of 2021, limited to a $14,000 credit per employee. In other words, if you have 10 employees on your payroll for the first six months of 2021, and your business is at least 20 percent down compared to 2019, you may be eligible for $140,000 tax credit against your portion of the employees' Social Security Tax. For more information, click here.
Also don't forget that your local municipality or state may have benefits for small businesses trying to recover from COVID. Many local governments are in line to get big bucks from the federal government in the latest relief package, and it's likely some of that money will flow to small business. Be on the lookout!