The Paycheck Protection Program has expired. The $29 billion Restaurant Revitalization Fund has officially closed its doors to new applications. But there are still plenty of places for a struggling small business to get help before the end of this year. If you’re in need of help, here’s what is still available.
Economic Injury Disaster Loans (EIDL)
Businesses impacted by the COVID pandemic may receive a loan for as much as $500,000 from the Small Business Administration (applications submitted before April 6, 2021, may be eligible for more). The loans are payable in 30 years with no pre-payment penalties or fees and interest rates are fixed at 3.75% (2.75% for nonprofits). The loans are still available through the end of the year and you can still get one even if you received a Paycheck Protection Program loan.
If you apply for an EIDL, you can also receive as much as $15,000 in grants that do not need to be repaid, even if you don’t get approved for the EIDL. To qualify, businesses (including sole proprietors, independent contractors, and private, nonprofits) must show that they are in low- to moderate-income areas, have fewer than 300 employees, and have revenue that fell more than 30% during the eight weeks beginning March 2, 2020 (or later, depending on certain criteria) compared with the same period in 2019. Businesses in those areas with fewer than 10 employees and that have suffered more than 50% revenue loss could be eligible for $5,000 more.
SBA Forgiveness on new and existing loans
If you receive an SBA Section 7(a) or 504 microloan before Sept. 27, 2021, you are eligible to have your first three months of principal and interest forgiven, regardless of whether and how your business was affected by the pandemic. You also get three months forgiven if you have an existing 7(a) or 504 loan. The loans are as much as $5 million and can be used for working capital, property, and equipment and are issued by SBA lenders only (not directly from the SBA). You can expect to go through similar due diligence as with any regular financing but the loans are 90% guaranteed by the federal government, so banks have an incentive to lend the money.
Shuttered Venue Operators Grant
This program is still accepting applications from businesses in the arts industry, such as live venue operators or promoters, theatrical producers, live performing arts organizations, museums, motion picture theater operators (including owners), and talent representatives. The grants — these are not loans — are equal to 45% of the applicant’s revenue, with the maximum amount available for a single grant award of $10 million. About $2 billion is reserved for eligible applications with as many as 50 full-time employees. Other restrictions apply.
Employee Retention Tax Credit
This payroll tax credit could be worth as much as $10,000 per employee for the entire year of 2020 and $28,000 per employee ($7,000 per quarter) for the entire year of 2021. To qualify quarterly in 2021, you must show that your business was either fully or partially shut down in that quarter or your revenues declined by more than 20% compared with the same quarter in 2019. If the credit is bigger than the taxes owed on your quarterly payroll tax return then you could be eligible for a refund. If you didn’t take advantage of the credit for 2020 or 2021 and you think you may have been eligible you can always go back and amend your tax returns. You can still utilize this credit even if you got a Paycheck Protection Program loan but you can’t use the same payroll funds that you used to apply for PPP forgiveness when calculating this credit.
Families First Coronavirus Response Act Tax Credit
Through Dec. 31 of this year, employers can be reimbursed for up to $511 a day through a payroll tax credit for any employee who misses work due to a COVID-related reason, including getting vaccinations (and any potential side effects) or watching over a sick family member.
Work Opportunity Tax Credit
Extended through 2025, this income tax credit can be as much as $9,600 per new employee when the employee meets certain criteria, such as being released from prison, getting off welfare or returning to work after being unemployed for more than six months. Some employers I know are using this tax credit to fund hiring bonuses for new employees.
Tax Loss Carryback
If your business is showing a loss for the years 2020, 2019 or 2018, then you’re being allowed — thanks to the 2020 CARES Act — to carry back that loss for up to five years and offset it against any previous profits reported. This means that if you paid taxes in any of those previous years, you can get some or all of those taxes refunded after offsetting the loss. Talk to your accountant about amending those prior year returns if you think you’re eligible.
Charitable Tax Deduction
Through the remainder of 2021, individuals are now allowed to take a special tax deduction of $300 ($600 for joint returns) when donating to a charity even if you are utilizing the standard deduction on your personal return. Businesses have a special deduction of up to 25% (it’s usually 10%) of their taxable income for charitable donations through the end of 2021.
COVID-related grant programs offered by the city have expired. However, the city’s InStore Forgivable Loan Program is still accepting applications to help existing retailers, restaurants, and those in creative arts get forgivable loans of as much as $50,000 to make interior improvements. The city’s Storefront Improvement Program offers grants of as much as $10,000 ($15,000 for multiple address businesses) to spruce up masonry, doors, lighting, security, and signage.
The state’s Department of Community and Economic Development is allocating $225 million of federal stimulus money to provide COVID-19 relief to small businesses through a distribution to Community Development Financial Institutions. Grants from $5,000 to $50,000 are available to eligible small businesses (those with less than $1 million in revenue and fewer than 25 employees) that have been “economically impacted” by COVID-19. Priority is given to minority owned and historically disadvantaged businesses (at least 51% owned and operated by people who are Black, Hispanic, Native American, Asian American, or Pacific Islander because they have traditionally been discriminated against and disadvantaged when seeking financial services and financial products).
New Jersey small businesses that have been negatively impacted by the pandemic (temporarily shut down, required to reduce hours, at least a 20% drop in revenue, materially impacted by employees who cannot work due to the outbreak, or have a disrupted supply chain and therefore slowed firm-level production) can still apply for the New Jersey Economic Development Authority Small Business Emergency Assistance Grant Program for grants of as much as $20,000. Applications will remain open through July 15, 2021, so hurry.
Unfortunately, new applications for grants under the state’s relief program are no longer being accepted.
Gene Marks is a certified public accountant and the owner of the Marks Group, a technology and financial management consulting firm in Bala Cynwyd.