• Bsquared

    Customized Solutions for Your Accounting & Business Needs

    Offices in St. Louis, MO & Panama City Beach, FL

    MO (636)-333-3339 & FL (850)-775-1675

    info@askbsquared.com

  • Covid-19 Small Business Relief

    Small businesses affected by the COVID-19 economic downturn make up a big part of our client base. Most of what we’ve been doing lately is helping our clients figure out how to get and use funds the federal Small Business Administration has set aside for Coronavirus relief. The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) can be lifesavers for small business owners and their current employees, and each program has specific requirements and consequences for missed details.

    The lessons we’ve learned while helping business owners navigate the ever-changing PPP and EIDL rules and deadlines could help you keep your business afloat, so we’d like to share five common mistakes and how to avoid them.

    1. Applying for the wrong program or total amount

    Not every small business qualifies for Coronavirus relief funds. If your business does qualify, it’s important to understand which program to pursue and how much you really need to maintain cash flow. While it might be tempting to apply for more than you need, the funds are limited and competition will continue to tighten as application deadlines approach.

    Find out more about eligibility for the PPP and EIDL programs, and calculate how much you should apply for before you begin.

    2. Missing key rule changes

    Everything about this pandemic remains fluid, and small business resources and funding are no exception. For instance, did you know on July 6, 2020  the President signed a bill to extend the deadline to apply for PPP funding through the CARES Act?

    The EIDL program was also opened to certain businesses with fewer than 500 employees as of June 15. EIDL guidance changes as the program is affected by funding levels and legislation, so check frequently and read the changes as they are released.

    3. Not keeping the right records

    Relief loans come with a lot of record-keeping requirements, especially if you want to seek loan forgiveness for PPP loans, and possibly for EIDL advances received, typically $1000 per employee upon applying.

    New rules based on the volume of loans require that 60 percent of the funds to be forgiven be used for payroll. While PPP loans can also be used for interest on mortgages, rent, and utilities, there are strict guidelines regarding keeping full-time staff on the payroll, filling vacancies as quickly as possible, and maintaining pay rates. Records must prove compliance, and any failure to provide those records may result in a reduced forgiveness amount.

    4. Misunderstanding how loans affect tax filings

    Any government funding affects your business’ federal tax classification and carries certain implications that you can’t afford to miss. As it currently stands,  business expenses covered by forgivable CARES Act loans won’t be deductible. But, we’re also expecting to learn more about tax changes related to Social Security, taxable business income, and the implications of accepting forgiveness for these SBA loans.

    With so many unknowns, it’s a good idea to seek guidance well before it’s time to file 2020 taxes so your business doesn’t miss essential breaks or changes to the tax bracket structure.

    5. Getting started without help

    You have enough on your plate without adding the hours of education, research, and diligence it takes to stay current with SBA programs and their changing rules and guidelines. However, not doing so can result in costly mistakes. Many Bsquared clients come to us frustrated due to the learning curve and the time it takes to apply for and manage PPP and EIDL loans. The best advice we can offer any small business owner is to get help from the beginning.

    The tax professionals on the Bsquared team understand the ins and outs of the relief programs available to small businesses through the CARES Act. We continue to keep up with rule and deadline changes to protect our clients from unpleasant surprises. Our focus is keeping your business compliant with all related IRS and SBA guidelines and record-keeping to protect you and your livelihood.

    Need help or have questions? 

    Email info@askbsquared or Call us:

     In Missouri (636) 333-3339

    In Florida (850) 775-1675

Powered by WP Robot