Financial institutions, law firms and accounting firms have been instrumental in their efforts to help small business owners get through the darker days of the COVID-19 pandemic. The singular goal during this time? Survival.
While the current situation for businesses is far from where it was before the pandemic, for many, attention may begin to shift to the future, from simple survival to seizing opportunities and striving to thrive. again. Today, the banks, law firms and accounting firms that helped businesses at the onset of the pandemic continue to provide key services and advice to help them through this time of transition.
More relief programs?
Paycheck Protection Program (PPP) loans have been a critical lifeline for many businesses during the pandemic, but the program’s expiration in May has certainly made it difficult to find appropriate relief from COVID- 19.
An alternative is the U.S. Small Business Administration (SBA) COVID-19 Economic Disaster Loan (EIDL), which is still accepting applications until the end of December.
Robin Lefkowitz, executive vice president and director of business development and branch administration at Avenel-based Northfield Bank, told New Jersey Business that the biggest question its business clients ask him is whether there will be additional assistance programs.
“Some states still have relief programs, and we hear there may be additional programs [that could come out], but there is only a limited amount of information available, âsays Lefkowitz.
On the positive side, she adds that much of the borrowing that occurs today is approved as more businesses qualify for loans.
“If companies can post decent numbers, even if they are not [that of a pre-pandemic level], there is a story that can be told and [the situation] is explainable, [due to the obvious effects of the pandemic]”, says Lefkowitz.
âMost of our borrowers are now at the point where they seem to be doing better. Companies don’t overdraw their accounts like they did, even in 2019. While they are back overdrawn more than they were in 2020, I think that’s not necessarily the case. nature of not having funds, but maybe having so many shopping opportunities and wanting to take advantage of some of the great credit rates right now, âshe explains.
The biggest challenge remains the uncertainty of what lies ahead.
“I don’t want to use the term good place because it isn’t, but it looks like we’re in a better place now than where we were,” says Lefkowitz.
Employee retention credit (ERC)
A lesser-known form of relief for businesses is the Employee Retention Credit (ERC), which is due to expire at the end of the year. It was created in March 2020 to encourage companies to keep their employees on the payroll.
âThe ERC has become an important source of refundable tax credits for businesses affected by the pandemic,â says Matthew Walsh, CPA, MS, SBA Financial Assistance Services Manager, WithumSmith + Brown, PC, based in Princeton.
Employers who have been forced to go out of business due to COVID-19 and those who have experienced a significant drop in gross revenue are eligible for the ERC, with eligible employers claiming up to 70% of the first $ 10,000 salary and health benefits during each qualifying quarter. . Small employers who have received a PPP loan can also apply for the ERC.
“To apply for the credit, eligible businesses can withhold deposits required for certain payroll taxes – credits exceeding the companies’ quarterly liability could either request a refund or a credit to carry over to their original quarterly 941s filed on time,” he said. said Walsh. .
“Calculating the ERC can be complex, especially when you consider the eligibility period, the overlap with other federal programs, and determining what salaries are considered eligible for the ERC,” he continues. Thus, the advice of the accountant of a company is useful.
Editor’s Note: In its current form, the $ 1.2 trillion infrastructure bill, if enacted, would move the ERC deadline from December 31, 2021 to September 30, 2021.
Taking safety precautions seriously is vital
While many businesses seek relief from a financial standpoint, those that welcome employees back to the office face their own challenges.
From deciding on a vaccination and mask policy to protecting against a possible COVID-19 outbreak in the office, Patrick T. Collins, chair of the work and employment practice group at Norris McLaughlin, says employers need to be proactive and cover all their bases when taking action to protect their employees and customers.