Financial Resources for Businesses
On March 11, 2021, President Biden signed the American Rescue Plan Act into law which provides additional relief for the nation's small businesses and hard-hit industries.
- Restaurant Relief Grant - The application portal opened on May 3, 2021 for all eligible food / beverage establishments and will stay open until the allocated $28.6 billion is exhausted. The grant program will provide funding a minimum of $1,000 and a maximum of $5 million per location up to $10 million. Funds must be used by grantees by March 11, 2023. This is a first come first serve program. Visit the SBA website to apply today.
Small Business Grants
- Amber Grant Program for Women - WomensNet founded the Amber Grant Foundation in 1998. The Foundation was set up with one goal in mind: to honor the memory of a very special young woman, Amber Wigdahl, who died at just 19 years old — before realizing her business dreams. Today, WomensNet carries on that tradition, giving away at least $10,000 every month in Amber Grant money. To learn more and apply for the grant, visit the Amber Grant Foundation’s website.
Federal Financial Assistance - Loans, Tax Credits, Tax Relief
On December 22, 2020, the Federal government passed the Coronavirus Response and Relief Supplemental Appropriations Act (CARES) with $284 billion for the Paycheck Protection Program (PPP) loans for small businesses. In addition, there are multiple funding options offered from the federal government for small businesses seeking relief. All SBA disaster loans made in the calendar year 2020 will have a first payment due date extended from 12 months to 24 months from the date of the note. All SBA disaster loans made in the calendar year 2021 will have the first payment due date extended from 12 months to 18 months from the date of the note.
- Paycheck Protection Program (PPP)– Forgivable loans of up to $2 million available to businesses with 300 employees or less. An additional $7.25 billion has been added to the program and eligibility has been expanded for sole proprietors, independent contractors, self-employed individuals, nonprofits and digital news services.
- Apply For Forgiveness For Current PPP Loan
Small businesses that received a federal Paycheck Protection Program (PPP) loan may apply for forgiveness. Visit the Small Business Administration’s PPP website or speak to your trusted legal or accounting advisor for more information. Complete an application from the Small Business Administration and submit it to your lender or the lender that is servicing the loan. Eligible costs that can be forgiven include payroll costs incurred and paid, and non-payroll costs such as mortgage/rent, utility payments, and transportation.
- Second Draw PPP Loans
Second PPP loans are available to businesses that received a PPP loan previously and that meet special requirements. Complete a second draw PPP application from the SBA. PPP loans are designed to be 100% forgivable as long as the proceeds are spent in accordance with program rules.
- PPP Loan requirements include:
- Second-time borrowers must have 300 or fewer employees. The rules of the program may limit participation if your organization has related entities, or if you are in certain industries.
- Businesses must demonstrate a reduction in revenue of at least 25% between corresponding quarters in 2020 and 2019. Special rules apply to businesses that were not in operation for all or part of 2019.
- The maximum amount for second draw PPP loans is $2 million
- Borrowers must have fully spent the loan proceeds from their first PPP loan before their second PPP loan is disbursed
- Apply For Forgiveness For Current PPP Loan
- Economic Injury Disaster Loan (EIDL) - Starting the week of April 6, 2021, the SBA is raising the loan limit for the EIDL loan. Applicants can now receive a maximum loan amount of $500,000. The lending limit increased from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.
Extension of Paid Leave Credits Under the Families First Coronavirus Response Act (FFCRA)
The COVID-related Tax Relief Act of 2020 (CTRA) extends the tax credit portion of the FFCRA for employers that voluntarily offer paid sick or paid family leave through March 31, 2021. More information is available on the Department of Labor's website.
- Employers with fewer than 500 employees must provide mandatory paid sick and paid family leave for certain reasons related to COVID-19
- Corresponding tax credits are provided to employers for any amounts paid to employees for the required paid leave
- Mandatory leave portion will terminate on December 31, 2020
Extension of Employee Retention Tax Credit (ERTC)
The CARES Act allows eligible employers to claim a federal tax credit with respect to qualified wages paid between March 13 and December 31, 2020. In addition, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (the “Act”) extends the ERTC to cover wages paid through June 30, 2021. As of January 1, 2021, the Act changes several qualifications for eligible expenses, including:
- Increases the credit rate from 50% to 70% of qualified wages
- Increases the per employee wage cap from $10,000 in the aggregate to $10,000 per calendar quarter
- Decreases the required decline in gross receipts from 50% to 20%
- Increases the threshold for treatment as a large employer from 100 employees to 500 employees
- Group health plan expenses may be considered qualified wages even if no other wages are paid to the applicable employee
Retroactive to March 13, 2020, the Act provides that employers who receive PPP loans may still be eligible for the ERTC to the extent qualified wages are not paid using forgiven PPP loan proceeds. Find more information on the IRS's website.
Extension of Repayment Period for Deferred Employee Social Security Taxes
The current guidance issued by the IRS (IRS Notice 2020-65) requires that any deferred employee portion of Social Security tax withholding between September 1 and December 31, 2020, must be ratably withheld and paid from wages and compensation paid to employees between January 1 and April 30, 2021, or penalties and interest would begin to accrue on May 1, 2021. The CTRA extends the repayment deadline from April 30, 2021, to December 31, 2021, and the date for penalty and interest to begin accruing from May 1, 2021, to January 1, 2022. Find more information on the IRS's website.