What do you need to know about the SMEs stimulus?
Congress approved a new SME stimulus aid.
The bill approved $484 billion to help small businesses keep afloat.
The initial stimulus program included $350 billion for small businesses to cover payroll and basic expenses. Nevertheless, on April 16 the fund ran out of money. That’s why a second, even larger stimulus fund has been implemented.
However, many business people still have questions regarding the stimulus program. Here we’ll answer some of them.
I got a PPP loan, can I also get funding through this new program?
If you were approved for a PPP loan and received confirmation from your financial provider, you should get your funds in about ten days. If you did not receive any sort of confirmation, you probably will not receive a loan from the first PPP program.
The best way to go is to check up with your lender institution.
If you didn’t apply for the first one, you can apply for the second program on May 5, 2020.
What if I didn’t get the first check
If you applied but did not get the first check, you do not have to re-apply, as most lenders did not reject the application, but just ran out of funds to process them. That means your application may be on the priority list for the second term program.
That means they will first process loans that were not funded in the first program.
Does my loan have any use limitations?
They have to be mostly used for payroll. 75 % of the loan must be used to that end, and no more than 25 % can be used for mortgage interests, rent, utilities, and debts. They must be used in the following eight weeks from the reception to be forgiven. If they are not used in that time frame, if they are used for other purposes, and businesses don’t keep their headcount, the loans must be repaid.
What if I want to pay myself with it?
If you are a sole proprietor, you can pay yourself from the funds. But if your company is a corporation, you are not entitled to use the money to pay yourself.
If you’re eligible, it’ll cover your salary up to $100k.
And the Employee Retention Credit?
This is a refundable tax credit launched on March 31, 2020. It was established to help companies keep their workers on the payroll.
The program doesn’t rely on the stimulus package. It’s a 50 % credit of up to $10k in salaries per employee if the business has been impacted by coronavirus. Thus, to qualify, the business must have been at least partially suspended by public order or received at least a 50 % reduction on quarterly earnings.
Nevertheless, you can’t apply for this program if you’ve already applied for the PPP.
What about an SBA loan?
You can also apply for a normal SBA loan.
However, you must take into account that financial institutions may find a hard time to process them right now, so it is wise to call your institution first to see if they can handle it.
If that is the case, SBA is a fantastic option. If you do not qualify for the PPP or are waiting for it.
Also, SBA payments have been suspended for a six-month period as a relief measure.