Financial Resources for Businesses
Federal financial assistance and private grants are available to small businesses to support them during the COVID-19 pandemic. As the economic reopens, these resources continue to be available. The American Rescue Plan Act provides this additional relief for the nation's small businesses and hard-hit industries.
Federal Financial Assistance - Loans, Tax Credits, Tax Relief
1) 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.
2) 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
3) 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.
4) 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.
Private Financial Assistance
1) 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.