New Option

Federal Reserve Main Street Lending

This program is still in the works but is designated for small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic. Limited information is currently available on the Federal Reserve Main Street Lending Program. More info to come as details are released.

Update to previous options:

EIDL (Economic Injury Disaster Loan)

Applications are no longer being accepted – the only exception is Agricultural businesses. EIDL is a grant and if the Employer is also approved for the Payroll Protection Program, the EIDL grant will be absorbed into those loan terms.

PPP (Payroll Protection Program)

Applications that have already been submitted are in line for the 2nd round of funding pending approval. See below for a sample timeline of approval to funding based on an actual Big Picture Results client:

Applied – April 15th
Received Loan Docs – May 2nd
Loan Funded – May 7th

We have also seen our clients realize success outside of their business bank and with a 3rd party lender instead such as Apple Pie Capital or Smart Biz.

BPR has processes in place to ensure PPP funds will be forgiven. Conversations regarding use of funds will begin approximately one month following loan disbursement. Funds not forgiven under the PPP will rollover to a 1% term loan. See highlights of PPP from our previous newsletter.

In the event that PPP funds are received Employer will not be eligible for the ERC (Employer Retention Credit). The PPP accommodates an immediate cash flow need as the funds are deposited within days following signing of a promissory note. The ERC (see below for more details) is a tax credit to be recognized following Quarterly Payroll reporting. The ERC allows for a max of $5,000 credit per employee whereas the PPP likely will result in the funding of a lesser amount. Be sure to decide which option makes the most sense for your business.

Employer Payroll Tax Deferments and Credits:

Social Security Tax Deferrals
Social Security taxes for 2020 can be deferred, half to be paid in 2021 and the other half to be paid in 2022. Check with your payroll provider as credit from other programs impacting Social Security taxes (i.e. ERC or paid leave credits) will be applied first.

FFCRA Sick Pay/Family Leave Tax Credits
Required Paid Leave cannot be used in conjunction with the PPP. For more details on these credits take a look at our last Newsletter.

Employee Retention Credit (ERC)
The ERC is a great plan B following the PPP if you can hold out the cash flow. ERC does not have to be applied for and can be applied to social security taxes or a refundable tax credit (must submit Form 7200).

The Employee Retention Credit is a tax credit that can be claimed for 50% of the first $10,000 in wages for each qualified employee.