18 Jan Federal Stimulus Package and How Your Small Business May Qualify for Help
With the new Federal Stimulus Package having been passed recently by Congress, we know that many of our clients are anxiously considering what new opportunities there might be for funding for your individual situation. At Reconciled Solutions we have been carefully reviewing the new options for financial stimulus and we feel ready to support you from questions with what might be the best fit for your situation, to assisting you with the completion of applications. Some of the opportunities are very straightforward, and we encourage you to proceed on applying for funding on your own. Other opportunities – specifically the Employee Retention Credit – require a deeper analysis to see if your business qualifies. You are welcome to put together your own applications on these different acts or if you would like to get support from Reconciled Solutions, we are happy to provide it. Please reach out to us at assist@reconciledsolutions.net if you would like to take advantage of one of our services, which include:
- Determination of Qualification for the Employee Retention Credit Opportunity ($99 fee)
- Employee Retention Credit Application Completion and Support ($499)
- PPP Loan Forgiveness Application and Loan Forgiveness Support ($999 or 1% of the loan if greater than $100,000)
Below is an explanation of some of the opportunities you may qualify for:
PPP Round 1 Loan
The Economic Aid Act makes first-draw PPP loans available to borrowers that were in operation on Feb. 15, 2020. If you did not apply for a PPP loan the first time aroundyou can go ahead and re-apply now. First round applicants need NOT meet the 25% reduction in revenue.
PPP Loan Increase or Reapplication
Qualifying individuals or entities that received a first round PPP loan may be eligible for an additional amount. Borrowers that returned or repaid a first-draw PPP loan may request a loan increase equal to the difference between the amount not paid back by the borrower and the amount previously approved. For example, if a borrower returned $25,000 of a $100,000 PPP loan because the borrower could not spend the funds during the covered period, the lender can disburse $25,000 back to the borrower provided other conditions are met.
PPP Second Draw Loans
The PPP borrower must have experienced a 25% reduction in revenue when comparing any calendar quarter in 2020 to the same quarter in 2019. Second draw borrowers must have also utilized the full amount of their first PPP loan and additionally, have under 300 full-time employees. The maximum loan amount increases to 3.5x the average monthly payroll costs up to $2Million for borrowers in the Accommodation and Food Services Sector with NAICS Code beginning with 72.
Shuttered Venue Operators
This pertains to certain live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives. The amount of the grant to a Shuttered Venue Operator that was in operation on January 1, 2019 will be equal to 45% of the gross earned revenue of such operator during 2019. For a Shuttered Venue Operator that began operations after January 1, 2019, the grant amount will be equal to 6 times the average monthly gross earned revenue for each full month of operation during 2019. In any case, the maximum grant amount is $10 million. Allocation of grants will include exclusive windows for operators with a 90% or 70% revenue reduction and a set aside for operators with less than 50 staff members. A Shuttered Venue Operator that receives a grant will not be eligible to apply for a First or Second Round PPP Loan. As of current, this program has not opened yet and we have not heard a date for opening of this grant. However, for those that have been shuttered, the Shuttered Venue Operators Grant opportunity will likely exceed the opportunity for a PPP loan. That said, it would make sense to wait on applying for a Second Round PPP loan if you can show the 70% or greater revenue reduction.
Employee Retention Credit 2021
The employee retention tax credit against payroll taxes that was originally enacted in March 2020 has been significantly enhanced. That tax credit now is (a) available for wages up to $10,000 per quarter per employee (previously it was limited to $10,000 per year); (b) based on 70% of qualified wages (previously it was 50%); (c) available to employers whose gross receipts decline by 20% or more (previously it was 50% reduction); and (d) extended for wages paid through June 30, 2021 (previously the cut-off date was December 31, 2020). PPP borrowers are no longer prohibited from claiming this credit on wages that were not the basis on which PPP loan forgiveness is based.
Employee Retention Credit 2020
Employers that received a PPP loan in 2020 can also be eligible for the ERTC in 2020. However, PPP funds and ERTC cannot be used to cover the same payroll costs. This makes most sense for folks who got their PPP loan in the 1st or 2nd Quarter of 2020 and had utilized the full amount by the end of Quarter 2. They would possibly be eligible for ERTC in Quarter 3 or Quarter 4.
EIDL Grant
This grant will be given to small businesses located in low-income communities, who have experienced a 30% reduction in gross receipts during any 8-week period between March 2, 2020 and December 31, 2021 compared to a comparable 8-week period before March 2 or in 2019. Also, if you meet this description and previously received a EIDL grant that is less than $10,000 you can reapply to receive the difference (those reapplying for the full grant will receive approval priority over new applicants).
Good luck to all of our small business family! Let us at Reconciled Solutions know if you have any questions about these federal stimulus options.
