(5 min read)
In late December, Congress approved a $900 billion relief package to help Americans weather the economic losses associated with the pandemic. But what does that mean for business owners?
These have been extremely trying times for everyone. Many families have struggled to make ends meet and many business owners who survived 2020 are still far from gaining footing in the shattered economy the COVID-19 pandemic has created. A relief package like this will be viewed as a literal life preserver for most.
But there’s one problem. Congress recently approved the $900 billion relief package attached to our fiscal spending for 2021, but with more than 5,000 pages of legislative text, the average citizen simply lacks the time and resources to analyze the documents and identify what’s best for them.
ReImagine Biz bridges that gap. With access to legal professionals combined with our distinctive business strategies, we have spent 2020 (and now 2021) identifying the perks business owners are eligible for and how you can take advantage of those resources to improve your business.
We encourage you to get what you deserve. Continue reading below to get the information you need to take real action towards acquiring additional funding in 2021.
Payment Protection Loans (PPP) are back
If you missed out on the forgivable (and now tax-deductible) PPP loan, do not fret. The new relief measures give you a second opportunity to get the funding you require to continue business operations. What’s more, now any expenses paid with proceeds from the PPP are considered a deductible, granting additional tax incentives. If you’ve already received and spent your PPP loan, any new changes as far as deductible will retroactively apply to previous loans.
If you have already received a PPP loan, you are now eligible to do a second draw. In order to qualify for a second PPP draw, you must:
- Have 300 employees or less
- Must have already used or plan to use your original PPP funding
- Must certify that you have had a loss of revenue of 25% or greater
The third step is critical. Again, in order to qualify for the second draw, you must be able to show a loss in revenue of 25% or more from at least one quarter of 2020 as compared to that same quarter in 2019.
Sole proprietors and single-member LLCs are equally eligible.
Nonprofits can join the party
For the first time, non-profit organizations are eligible to acquire a forgivable PPP loan. In the event that you have both a non-profit and a for-profit business, as of now, you will be able to secure a loan for both organizations providing you can supply the appropriate documentation for approval.
Don’t overlook the Economic Injury Disaster Loans (EIDLs)
The Economic Injury Disaster Loan (commonly abbreviated as EIDL) is an SBA-backed loan that supplies business owners with emergency funding due to disaster circumstances. This loan—unlike the PPP, which is filtered through private banks—comes directly from the government. There is a $10,000 grant available (similar to the last relief fund) but the conditions to receive them have been slightly altered.
The conditions to receive the grant are as follows:
- Be located in a low-income community
- Have suffered an economic loss greater than 30%
- Employ no more than 300 employees
In addition, the business MUST qualify as an eligible entity as defined in the CARES Act:
- A small business, cooperative, employee stock ownership plan (ESOP), tribal small business concerns, with fewer than 500 employees*
- An individual who operates as a sole proprietorship, with or without employees, or as an independent contractor
- A private non-profit or small agricultural cooperative
- The business must have been in operation by January 31, 2020
- The business must be directly affected by COVID-19
Important to note, if you applied for a PPP loan earlier in 2020 you may still be eligible for the grant even if you were denied.
Lastly, PPP forgiveness has been simplified. All loans under $150,000 will have a simple one-page application. The maximum loan amount you can receive from a second PPP draw is $2 million.
Here’s what to do next
2021 is our opportunity to reimagine the 21st century. It’s up to each one of us to break new ground when it comes to building a more equitable society for all. Now is our time. Let’s make a difference.
Did you know ReImagine Biz now offers avenues to acquire business funding and cost-effective POS systems?
Contact us to schedule an appointment to speak with one of our trained business consultants. Visit our website reimaginebiz.com to learn more about how we’re building a future of pioneering entrepreneurs.
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