If you have a business that’s been in business for at least a year, the SBA has money for you. The average total is $50K for small businesses. That’s money in your bank account with a minimum or hassle and work. If you don’t have your money, why not? Let’s look at the reasons:
(1)You don’t have a business. Answer: Start a business! The best time to start a business is 10 years ago. (Or in this case, at least a year ago) Second best time is today! (2)You haven’t applied. Answer: Apply! The two best programs for self-employed business owners, Solopreneurs, 1099 workers and the like are: PPP (Paycheck Protection Plan) and EIDL (Economic Injury Disaster Loan). (3)You started your business too late. Answer: The CARES Act by Congress said that a business started in 2020 would be eligible, but the SBA disagreed. That’s bad news for you if you just recently started your business. This may sort out some day in court. I hope so, because if you’re in that spot, you TRIED to do what you needed to for your financial future. It’s just that you missed the window of opportunity by a few months. The Paycheck Protection Plan (PPP) Round 1 and Round 2 The PPP has been extended until 8/5/2020 and right now, Congress is discussing a second round of PPP. This would be a separate program with a slightly restricted pay-out:
- 300 or less employees,
- Gross revenue in this quarter must be 50% or less than a quarter in the previous year.
We don’t know whether this will pass. If it does pass, we don’t know if what we’ve heard so far will be the law. And finally, we don’t know the details. I’m very curious how to use the income calculation. Does it have to be the same quarter? For example, is it Q2 2020 compared to Q2 2019? Or could it be Q2 2020 compared to another quarter in 2019?
We do know the amount you can receive: 2.5 times average monthly salaries paid. (A different calculation is used for the owner, depending on the entity type)
That’s the second round of PPP. You can get both the first and the second round, provided you qualify. That means 5 months worth of payroll expenses are covered by the government.
The Economic Injury Disaster Loan is Still Around! But that’s not all there is! A business that has suffered loss due to coronavirus can also qualify for an EIDL (economic injury disaster loan). The advance part of the EIDL has run out of the money, but the loan is 3.75% fixed over 30 years fully amortized and it’s still available.
That’s a great loan! Add those up, and it means more money in your bank account. Some is a grant and some is a loan, but it is a really good loan.
Let’s face it.
The system isn’t fair. It’s engineered to put more money in the pockets of people who have businesses and/or own rental real estate.
Do those things and you’ll get free money, cheap money and tax benefits like you wouldn’t believe.
Start a business. And the take advantage of what you’ve got coming to you.
For more information on PPP and EIDL, make sure you check out these articles: