Covid relief package passed by Congress Earlier this week, પા 284.45 billion was disbursed to eligible industries.
Plus, at the moment, specially designed to help restaurants and minority-owned businesses.
“Christmas came early for small businesses,” said Chris Hurne, founder of Fountainhead, a non-bank lender backed by the Small Business Administration.
Here are some clues Changes in PPP Loan Program:
Businesses can now take out another PPP loan
Businesses receiving PPP loans when the program was first implemented can now apply for a “second draw” unless they are a public company, employ more than 300 people, or make full use of the first PPP loan, and the same quarter of 2019. In comparison the first, second or third quarter of this year could show a decrease of at least 25% in total receipts.
A special amount is set aside for community development financial institutions – which typically lend to minority-owned businesses in underworld communities – and even For businesses with less than 10 employees, as well as in the low-income sector.
Most eligible industries can get a loan of 2.5 times the average monthly payroll cost as before. But restaurant and living businesses now times. times can apply for a loan.
No loan can be more than 2 million, which is basically less than 10 10 million.
Streamlined waiver process for loans under 150,000
To forgive a PPP loan, businesses that have borrowed 1,000,000 or less will need to submit a one-page certification that includes the number of employees retained in the business as a result of the loan, the estimated cost of the loan on parole, and the total loan amount. Recipients must also make sure that the information is accurate and that they are Compliance with loan requirements.
For any PPP loan to be fully forgiven, at least 60% of the money must be used for payroll costs. And the remaining 40% or less can be used to cover the wider coverage of business costs, which occurred during the initial round of PPP financing.
In addition to mortgage interest, Rent and utility payments, for example, loans can now be used to cover personal protective equipment and other expenses incurred to meet covid restrictions, as well as certain operations, property damage and supplier costs.
Big tax break on business expenses
Businesses typically deduct their payroll and operating expenses from their total revenue.
But the industries that get PPP loans, the costs are mostly paid by the loan.
The latest Covid relief package makes it clear that if the loan is forgiven, the business will be considered tax-free.
And it further clarifies that while a tax-free loan can pay for many payroll and operating operating costs, the business can still deduct those costs on its tax returns.
Tax policy experts are considering the legislators’ decision here because it is considered a “classic double dip” in a taxpayer’s pocket.
But for small businesses that are just trying to survive an epidemic, it is a great source of relief because their incomes have been so tight and there is no real recovery for them. Covid prolongs sanctions and consumer fears.
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