Funds are Running Out. What Does That Mean for Small Business Owners?

Paycheck Protection Program Update: Funds Are Running Out

April 15, 2020

Reports out of Washington are indicating that the Paycheck Protection Program (PPP) funds are quickly running out and could be exhausted by as early as the end of the week. finance.yahoo.com
While over 1 million loan applications have been approved, there are still many more small businesses that need substantial aid in order to survive the economic downturn caused by the COVID-19 pandemic. The Administration and Congress have both acknowledged a need and desire for more funding; however, they are currently at an impasse and there is no resolution in sight.

Unfortunately, this is exactly what HIREtech’s CEO, Brian Cameron, predicted would occur when he was talking with bankers and small business owners prior to the approved date to begin applying for the PPP funding. In an email sent to HIREtech clients, he revealed that “some business owners have told me they believe this (PPP) process will be messy, unorganized, and will leave many potential businesses out of luck with limited funds available.”
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Considering this, and with a desire to help HIREtech clients and other small business owners know and evaluate their options for aid, HIREtech began shedding light on a lesser known but potentially more beneficial part of the CARES Act, the Employee Retention Credit (ERC).

While the PPP has a limit on funds available, the ERC is a fully refundable tax credit that incentivizes employers (including non-profits) to retain their staff during the COVID-19 pandemic by providing specific payroll tax relief. Businesses of any size can apply for the ERC, although there are different levels of tax relief based on a full-time employee count of over or under 100.

For more information about the ERC, visit irs.gov

The ERC provides substantial benefits to business owners, and “the savings can result in similar, and often even increased cash back to your business, as compared to the PPP.” This is welcome news to small business owners who may get left out of the PPP cash relief.

If you’d like to learn more about your potential ERC benefits, or even compare your potential benefits between the ERC and the PPP, you can do so by utilizing our COVID-19 Tax Credit Analyzer. This tool, accessed by using the button below, will help you find the clarity you need to make the most informed, best decision for relief available for your business.

As always, feel free to reach out to us to help you assess your situation and your options. As we are updated with further information regarding relief, we will pass that information along.

Visit our COVID-19 News Page for key updates regarding legislation, state unemployment claims information, relief updates, and more.

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