There’s been some changes in the SBA Covid Relief Programs recently. Read below to learn more about these changes and how they might impact your business.
PPP Loan Forgiveness
The Paycheck Protection Program (PPP) loan period ended May 31, 2021. Existing borrowers may be eligible for loan forgiveness for all of their PPP loan. Loan forgiveness for both First and Second Draw PPP loans are available if the following criteria is met:
- Employee and compensation levels were maintained for the 8-24 week covered period.
- The loans were spent on payroll and other eligible expenses.
- At least 60% of the proceeds went to payroll costs.
Businesses can apply for loan forgiveness as soon as all the loan proceeds have been used.
Many lenders have signed on to the Direct Forgiveness Portal set up by the SBA to streamline the loan forgiveness process. You can download an Excel spreadsheet HERE to see if your lender has signed up for the Direct Forgiveness Portal. Contact your lender directly for their loan forgiveness program if they have not joined the portal. All businesses applying for forgiveness will have to submit information regarding the use of the PPP loan proceeds they received. You can read more about what documentation you will need to provide HERE.
Shuttered Venue Operators Grant
Note: The deadline to apply for the Shuttered Venue Operators Grant (SVOG) is Friday, August 20, 2021 at 11:59pm Pacific Time. Later in August, those that receive an SVOG will be able to apply for a supplemental grant up to 50% of the original award amount.
The SVOG is available to businesses that support the arts, including venues with live music or performing arts. Businesses that received PPP loans are eligible to apply for the SVOG grant. You can download the Frequently Asked Questions PDF HERE.
Eligible applicants may be able to receive grants up to 45% of their gross earned revenue up to a maximum of $10 million.
Employee Retention Tax Credit
The Employee Retention Tax Credit (ERTC) was created as part of the CARES act to encourage employee retention during the COVID-19 pandemic. The ERTC allows qualified business to claim up to 70% of the first $10,000 in pay and health benefits in each quarter for which they qualify.
It has been extended several times and was set to expire December 31, 2021. The current national infrastructure bill that is before Congress now would end the ERTC early, changing the expiration date to September 30, 2021 if the bill passes before then.
Businesses may also apply retroactively for the credit for previous quarters dating back to the beginning of the pandemic. A rule change also allows businesses who received PPP loans to claim the ERTC and can be claimed retroactively as well. In addition, “recovery startup businesses” (being those that opened after February 15, 2020) will still qualify for the ERTC until the end of the year.