December 27, 2020 – NEW! The $900 billion Coronavirus Response and Relief Supplemental Appropriations Act has been passed by Congress and signed by the President. In addition to providing relief for individuals (including stimulus checks of up to $600 per adult, enhanced unemployment insurance, an extended moratorium on evictions and more), the package offers several measures that could benefit your small business.
A separate bill has been introduced that would increase individual payments, and additional changes to the bill have been discussed. The info contained in this article is accurate at the time of publication.
As an advocate for your business, we want you to know about new opportunities you may have – even if you already received funding through the CARES Act earlier this year.
The Paycheck Protection Program (PPP) allows small businesses to obtain forgivable loans through the Small Business Administration (SBA) that will help them hold onto employees by covering costs like payroll, rent, utilities and other operating expenses. Closed since August, the program has relaunched with $284 billion in funding.
Employers with no more than 500 employees are qualified to receive loans. (Larger businesses have been excluded from this round.) Employers who are sole proprietors, independent contractors or self-employed are included. 501(c)6 organizations (other than unions) are now eligible, as well.
NEW! You now qualify to receive a second PPP loan if you took one out already and have no more than 300 employees. This additional loan is capped at $2 million.
Are you in the accommodation and food service industry? You’re eligible a second loan for 3.5x your monthly payroll costs.
The PPP loan is forgivable if you meet criteria for employee retention and use funds for eligible expenses. The new bill clarifies that eligible expenses include providing employee insurance benefits other than medical coverage (such as dental and life insurance).
Additional SBA loan programs have been re-funded with $20 billion – including Economic Injury Disaster Loans (EIDL).
The EIDL program provides working capital loans to offset decreased revenue due to COVID-19. (A working capital loan finances a company’s everyday operations to meet short-term needs.) EIDL loans cover your debts, payroll and other bills that aren’t covered by the Paycheck Protection Program.
Though these loans aren’t forgivable, you may find them affordable.
Interested in applying? Complete your worksheet here.
Launched as part of the CARES Act in March, this legislation allowed businesses with revenue declines related to COVID-19 to receive a 50% tax credit against payroll taxes on the first $10,000 of the annual wages and benefits of the employees they retain.
The credit has now been expanded to 70%, and you can take it on the first $10,000 in wages and benefits each quarter.
And if you took out a PPP loan, you can now take this tax credit on any compensation that wasn’t paid for by PPP funds.
Business meals are now fully deductible – instead of the previous ceiling of 50% – for two years.
As an advocate who believes in your business, we’re sharing resources and guidance that could help you out right now. Because we know you want to do everything you can to save money, we’re also here for you with free quotes that could lower your rates on business insurance (or even improve your coverage). Ask a licensed Mylo agent to review your current policy and try to beat it.