Webinar Provides Information on COVID Loans for Distressed Businesses

Local business owners who missed the first round of funding through the Paycheck Protection Program – and those who received funding but were exceptionally affected by the pandemic – have until the end of March to apply for the second. federal aid round.

Congressman Josh Harder hosted a webinar with a panel of guests on Friday including representatives from the United States Chamber of Commerce, the US Small Business Administration, and local Small Business Development Centers, all of whom attended. provided information and answered questions from small business owners.

“Our businesses have gone through the bells in the past year and we need to do everything we can to support them,” Harder said. “… I encourage our local business community to take advantage of the programs that exist to help weather this storm and come out of the pandemic stronger than ever. “

SBA’s Dawn Golik, director of the Fresno office that oversees the 15 Central Valley counties, said the PPP has been a lifeline for local small businesses. In Harder’s 10th Congressional District alone, the P3 has so far saved nearly 100,000 jobs with millions of dollars distributed to 7,000 businesses.

The PPP allows employers to apply for loans to keep their employees on the payroll specifically during the coronavirus pandemic. Businesses can apply for loan cancellation if they verify that the funds were used to retain employees and make payments, including mortgage interest, rent, and utility payments. A second round of the PPP was opened on January 11 with new funding of $ 284 billion and business owners can apply until March 31, but the sooner the better.

“The good news is that the program has even more favorable conditions than in the first round,” Golik said.

The eligibility of first-time PPP applicants who have not received a loan by August 9, 2020 has now expanded to include other types of entities such as housing co-ops, destination marketing organizations , certain 501 (c) (6) organizations such as Chambers of Commerce and qualifying news organizations. These are in addition to entities that were already eligible, including sole proprietors, independent contractors, freelancers, business entities (e.g. partnerships, corporations, LLCs), non-profit organizations , veterans organizations and tribal businesses.

Those applying for a first PPP loan must be active by February 15, 2020.

Borrowers who have already received a PPP loan can apply for a second drawdown if they have 300 or fewer employees and experienced a 25% reduction in gross revenue between comparable quarters in 2019 and 2020.

Businesses can apply for a PPP loan forgiveness through their lender, and under the CARES Act, PPP forgiven loans are not federally taxable income. If borrowers do not request a rebate, payments begin 10 months after the last day of the period covered.

For more information on PPP, such as how to find a lender or apply, visit https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.

In addition to the PPP, business owners can also apply for the COVID-10 Economic Disaster Loan, which provides assistance to businesses experiencing a temporary loss of income due to the pandemic. Qualified small businesses, cooperatives and agricultural enterprises with 500 employees or less as well as private non-profit associations are eligible for this loan.

To apply to EIDL, visit https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans.

A new SBA program is also in the works, called the Shuttered Venue Operators Grant, although applications are not yet open. Entities eligible for this assistance include theater operators or promoters, theater producers, live performing arts organizations and theater operators, museums, zoos, aquariums and representatives. of talents. These entities must have been in operation by February 29, 2020 and must not have applied for or received a PPP loan on or after December 27, 2020

“You are not alone right now,” Golik said.

Vartan Dijhanian of the United States Chamber of Commerce reminded viewers of the Employee Retention Tax Credit webinar, which saw positive changes in the new COVID relief bill.

The employee retention credit under the CARES Act encourages companies to keep their employees on their payroll. The refundable tax credit is 50% of a maximum of $ 14,000 of salary per employee paid by an eligible employer whose business has been financially affected by COVID-19.

“(The tax credit) is a hidden gem in the latest relief bill,” Dijhanian said. “It’s even better because he lowered the eligibility threshold for employers who experience a 20% loss in revenue.

The credit provision also raises the cap to 500 or fewer employees and examines revenue losses in comparable terms or quarters, rather than years. Eligible individuals can benefit from both a PPP loan and an employee retention tax credit.

In order to claim the new employee retention tax credit, eligible employers will report their total qualified salaries and corresponding health insurance costs for each quarter on their quarterly tax returns, which will be Form 941 for the most employers, from the second trimester. The credit is deducted from the employer’s share of social security contributions but the excess is refundable under normal conditions.

In anticipation of the credit claim, employers can retain a corresponding amount of employment taxes that would otherwise have been filed, including federal income tax withholding, employees’ share of Social Security taxes, and health insurance and the employer’s share of social security and health insurance. tax for all employees, up to the amount of the credit, without penalty, taking into account any reduction for deposits in anticipation of the sick leave and paid family leave credit provided for in the Families First Coronavirus Act Response Act.

Eligible employers can also request an employee retention credit advance by submitting Form 7200.

For more information, visit https://www.irs.gov/coronavirus/employee-retention-credit.

Valley Sierra Small Business Development Center Director Katy Winders reminded viewers that their local center can answer all of their questions about loans and applications. The Valley Sierra SBDC serves Stanislaus County and can be contacted at 209-422-6416.

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