As the COVID-19 Pandemic continues to burden the economy additional resources have been released to support small businesses during this difficult time. Below are some of the program details that have either been enhanced or modified to provide additional financial resources.
Paycheck Protection Program (PPP) First Draw and Second Draw PPP Loans are available. The program is accepting applications through March 31, 2021, or until the new funding is exhausted. The initial eligibility requirements stand for a first draw 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:
Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses; has no more than 300 employees; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
Expanded Employee Retention Tax Credit:
The new law has expanded the eligibility of employers. Now employers can utilize these credits if they experienced a decline of more than 20% in the corresponding quarter as it compares to 2019 sales. The maximum amount of credit opportunities has also been significantly increased for the time period beginning on January 1, 2021, and will expire on June 30th, 2021. If you previously did not take advantage of these tax credits because you received a PPP loan, you are now able to utilize these credits. Small businesses who previously received the PPP Loan may now utilize the Employee Retention Tax Credit, however, they may not use the same payroll periods in conjunction. Visit with your accountant if you feel you may be eligible 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 no more than 300 employees, located in low-income neighborhoods, who have experienced a 30% reduction in gross receipts during any 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 received a grant that is less than $10,000 you can reapply to receive the difference.
These are a few 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 seeking other options, please reach out to the ASU- SBDC advising team for more details on the programs listed above as well as the “Grants for Shuttered Venue Operators” targeted to small business venues and the SBA Loan Debt Forgiveness program for any current SBA Borrower. The Certified Business Advisors of the ASU-SBDC have a vast knowledge of both federal and local funding opportunities and programs; together they have helped hundreds of area small businesses obtain funding during the COVID- 19 pandemic.
“Business Tips” was written by Dezaray Johnson, Business Development Training Coordinator, of Angelo State University’s Small Business Development Center. For more information on the topic of this article or the services of the ASU · SBDC, contact her at Dezaray.Johnson@angelo.edu