The recently enacted federal stimulus package puts paychecks directly into American bank accounts and sets aside financial aid for small business.
As more business owners experience uncertainty amid the COVID-19 pandemic, the billions in assistance is welcome news. To those employers who retain their staff, forgivable loans are available, along with several other provisions designed to keep small business engines operating.
The federal Small Business Administration will manage $10,000 emergency grants for businesses, which do not require repayment. Funds are available within three days after businesses submit applications.
The funds can be used to keep payroll moving, pay sick leave and other business debt obligations.
Short-term forgiveness loans
Loans will be made available to small businesses and will be partially forgiven under certain conditions. The Small Business Administration is authorized to offer loans equal to 250 percent of the average monthly payroll of the loan applicant.
Some businesses may not have to worry about eight weeks’ worth of payroll, rent, mortgage or utility payments.
Tax credit for employee retention
If businesses are seeing a 50 percent drop off in gross receipts, they can qualify for a payroll tax credit worth up to $10,000 per employee.
Those businesses forced to furlough staff due to state or local mandates may also make a claim.
Businesses with existing loans through the Small Business Administration can have interest or principal payments suspended for six months.
We understand this may be a difficult time for your business. We are here to help.
If you have any questions about these programs, give us a call. Our consultative services will help you identify areas where improvement can occur while also providing vital resources and training.