COVID-19 Financial Relief Resources for Your Small Business

This post was contributed by our partners at Bench.

If your small business has been impacted by COVID-19, you have financial options. From federal loans to local grants, here’s a walkthrough of available resources to help your business stay afloat. 

For any loan or grant application, we recommend getting your 2019 bookkeeping and taxes completed. This will put you in the best position to secure funding, and be eligible for loan forgiveness where applicable. 

Have any questions at all about financing, bookkeeping, or taxes? Reach out to Bench and learn more. 

  1. Federal government relief 

Paycheck Protection Program

Weren’t able to get funding during the first round of the Paycheck Protection Program? Good news: an additional $310 billion of funding has been approved by the federal government. This newly updated bill makes additional guarantees that at least $60 billion must be granted by small banks, community financial institutions, and credit unions to ensure that truly small, local businesses get a chance at funding. 

The highlights: 

  • The funding is meant to help retain workers, maintain payroll, and cover rent/mortgage/utility expenses.
  • Small businesses, sole proprietorships, independent contractors, and self-employed individuals can all qualify.
  • The loan covers expenses dating back to February 15, to June 30, 2020.
  • The loan can be forgiven and essentially turned into a non-taxable grant.

Further Reading: The Paycheck Protection Program and Health Care Enhancement Act: What You Need to Know

EIDL Program

These low-interest federal disaster loans for small businesses quickly ran out of funding in its first round. The newly approved bill provides an additional $60 billion to the program, including $10 billion to the EIDL emergency grant. 

The highlights: 

  • The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million.
  • You can use this loan for typical day to day expenses such as mortgage payments, payroll, accounts payable, utility payments, or vehicle payments.
  • You cannot use this loan to refinance existing debt, to replace lost sales or profit, or fund purchases of equipment, vehicles, and supplies.
  • Loans that exceed $25,000 must be secured by collateral. The SBA will not decline a loan if you don’t have enough collateral but will ask for whatever collateral is available, which may include real estate owned by a business’ principals.

Further reading: How to Get an SBA Disaster Loan

SBA Express Bridge Loans

Applied for an SBA disaster loan but need cash, now? The Express Bridge Loan Pilot program authorizes SBA Express Lenders to provide emergency loans in amounts up to $25,000 while your small business applies for and awaits long-term financing through SBA’s direct Disaster Loan Program. 

There is a catch, though—your small business must have an existing business relationship with an SBA Express Lender. Check with your banking institutions to see if they offer SBA Loans.

The highlights: 

  • The small business must have an existing relationship with the funding bank prior to March 13, 2020.
  • Up to $25,000 in funding.
  • Fast turnaround.

Further Reading: The Express Bridge Loan Pilot Program (A Simple Guide)

Employee Retention Tax Credit

You can be eligible for payroll tax credits if you keep your employees on payroll, if you paid COVID-19-related sick leave for employees, or if you had to suspend operations.

The highlights: 

  • Employers with fewer than 500 employees are eligible for payroll tax credits, if they keep their employees on payroll throughout the COVID-19 crisis.
  • These tax credits can significantly lower your tax bill.
  • You cannot qualify for these tax credits if you’re also applying for the Paycheck Protection Program.
  • Relief is available for qualified wages paid after March 12, 2020, and before January 1, 2021.

Further Reading: Employee Retention Credits: A Simple Guide

  1. Regional funding

If you’re unable, or not eligible, to receive federal funding, make sure you check your local chamber of commerce, economic development office, or nonprofit for relief programs.

Further Reading: COVID-19 Resources, State by State

  1. Explore alternative resources

If you’re unable to receive funding from the federal or state government, there are alternative resources available. Many large companies and industries have stepped up for the small business community, and we encourage you to look within your professional network for available grants. Here are some options we recommend: 

Facebook Small Business Grants Program

Facebook is providing cash grants and ad credit to small businesses with 2–50 employees.

  • Applications will be open to cities on a rolling basis. Visit the site to see if it’s open for your city.
  • Must be a for-profit company that has been in business for over a year. 

You can apply here

The Photographer Fund

CERF+ Emergency Assistance

Google Ad Credits for Small and Medium-sized Businesses

Further Reading: The PPP and EIDL Are Closed. Now What?

Bench can get your books caught up and your finances organized—so you can get funded and take back control of your business. 

Use this link and you’ll get 20% off your first six months of bookkeeping and record-keeping support.

4 Steps to Getting Your Business Through COVID-19

Our partners at Bench are here with some action items that you can implement right now to help your small business confidently face whatever comes next.

With the effects of COVID-19 rippling through the economy, it’s easy to feel overwhelmed. Many businesses are being forced to shut their doors temporarily. What should you do first? How can you protect your finances in a volatile economy?

1. Understand your business’ current financial position

It’s always a good idea to have a handle on your numbers, but this becomes doubly important during times of economic uncertainty. 

A clear understanding of your company’s financial position lets you immediately see where you can cut costs, what expenses you can justify, and what debts might need to be renegotiated or deferred. Evaluate current assets and loans and see what can be leveraged during this time. 

A clear understanding of your company’s financial position lets you immediately see where you can cut costs, what expenses you can justify, and what debts might need to be renegotiated or deferred.

Bookkeeping in times of recession is more important than ever—having financial statements on hand is often necessary for payment deferrals or loan applications. If you’re behind on your bookkeeping and you’re not sure how you’ll get financial statements together, Bench can help. 

2. Apply for disaster loans or financial relief

Nobody was ready for the heavy-hitting impacts of COVID-19, but the government has stepped up and is rolling out new programs and loans to help you stay in business. 

Here are some of the latest options to take advantage of: 

SBA Disaster Relief Loan 

The U.S. Small Business Administration (SBA) has approved low-interest federal disaster loans for small businesses suffering substantial economic injury as a result of COVID-19.

The highlights: 

  • The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million.
  • You can use this loan for typical day to day expenses such as mortgage payments, payroll, accounts payable, utility payments, or vehicle payments.
  • You cannot use this loan to refinance existing debt, to replace lost sales or profit, or fund purchases of equipment, vehicles, and supplies.
  • Loans that exceed $25,000 must be secured by collateral. The SBA will not decline a loan if you don’t have enough collateral but will ask for whatever collateral is available, which may include real estate owned by a business’ principals.

Further reading: How to Get an SBA Disaster Loan

SBA Express Bridge Loans

Applied for an SBA disaster loan but need cash now? The Express Bridge Loan Pilot program authorizes SBA Express Lenders to provide emergency loans in amounts up to $25,000 while your small business applies for and awaits long-term financing through SBA’s direct Disaster Loan Program. 

There is a catch, though—your small business must have an existing business relationship with an SBA Express Lender. Check with your banking institutions to see if they offer SBA Loans.

The highlights: 

  • The small business must have an existing relationship with the funding bank prior to March 13, 2020.
  • Up to $25,000 in funding.
  • Fast turnaround.

Further Reading: Express Bridge Loan Pilot Program Guide

Paycheck Protection Program

The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This program is intended to provide American small businesses with eight weeks of cash-flow assistance through 100 percent federally guaranteed loans. 

The highlights: 

  • The funding is meant to help retain workers, maintain payroll, and cover rent/mortgage/utility expenses.
  • Small businesses, sole proprietorships, independent contractors, and self-employed individuals can all qualify.
  • The loan covers expenses dating back from February 15, to June 30, 2020.
  • The loan can be forgiven and essentially turned into a non-taxable grant.

Further Reading: What is the Paycheck Protection Program? (A Simple Guide)

The CARES Act (Coronavirus Aid, Relief, Economic Security)

The government just passed one of their biggest financial relief bills yet—the CARES Act (Coronavirus Aid, Relief, Economic Security). $350 billion is being dedicated to preventing layoffs and business closures while workers have to stay home during the outbreak. 

The highlights: 

  • Expanded Family and Medical Leave Act benefits for employees who are unable to work due to COVID-19.
  • Forgivable loans and tax credits for businesses that keep their employees for the duration of the crisis.
  • Deferment of an employer’s 6.2% share of Social Security taxes based on employee wages.
  • Expanded write-offs for improving property for retailers, restaurants, and hotels.
  • Expanding unemployment benefits for small business owners, self-employed individuals and gig workers.
  • Option to carry back net operating losses to offset taxable income in prior years.
  • Extension of time to file and pay 2019 taxes.

Further Reading: The Coronavirus Relief Bill: Every Benefit for Small Businesses

3. File your taxes sooner rather than later

If your tax filing deadline is April 15, good news: the IRS has officially extended this deadline to July 15, 2020. This extension includes making payments on any taxes owed, so you can defer without penalties and interest. 

But just because you can put off filing your taxes, doesn’t mean you should. If you’re owed a refund, the IRS is encouraging taxpayers to file as soon as possible. Most tax refunds are still being issued within 21 days, which could mean some much-needed cash back for your business.

If you’re owed a refund, the IRS is encouraging taxpayers to file as soon as possible. Most tax refunds are still being issued within 21 days, which could mean some much-needed cash back for your business.

Even if you owe money, it’s still in your best interest to file sooner rather than later. A lot of lenders or relief programs want to see an up-to-date business tax return. By filing now, you’ll have this important document on hand and ready to go—and you’ll still have until July 15 to make a payment for any taxes owed.

If you’d rather have someone else handle your federal income tax filing, check out BenchTax. It’s optimized for remote working conditions, and gives you the support you need to navigate changing deadlines and tax environments.

4. Consider pivoting your business strategy

Even if you’ve made all the right moves for your business during COVID-19, there are still some things that are out of your control. A dip in sales is one thing, but what if your customers or revenue disappear altogether? 

Loyal customers are eager to help out their favorite small businesses if they can, so staying connected and empathetic to your customer base right now goes a long way. 

Consider an alternative, temporary revenue stream. Create an e-commerce site for your brick and mortar store. Or, if you run a fitness studio, stream live classes. If you run a salon or spa, sell gift cards for future services. Loyal customers are eager to help out their favorite small businesses if they can, so staying connected and empathetic to your customer base right now goes a long way. 

Further Reading: Leading a Small Business Through a Recession: Five Best Practices

Everything You Need to Know About the New Tax Deadline

What the New Tax Deadline Means for Your Refund, Who It Applies To, and More 

April 15th is synonymous with one thing for most Americans: taxes. This day marks the typical deadline to file (and pay) income taxes for the majority of individuals and businesses. But things are a little different this year.

In light of the global outbreak of COVID-19, the IRS recently announced that the deadline for filing 2019 taxes and tax payments has officially been extended to July 15th, 2020. This change marks a 90-day extension to file income taxes. 

Of course, the most important thing to know about the deadline change is that individuals and small business owners now have until July 15th to file and pay their taxes. But who does this extension apply to? What does this mean for refunds? 

A change like this can spark a lot of questions. That’s why we’re answering some of your most pressing questions about the new tax deadline below.  

Who does the new tax deadline apply to? 

The new tax deadline applies to all federal income tax returns (and payments) due on April 15th, 2020. It also applies to all types of federal income tax filers: individuals, trusts and estates, corporations and those who pay self-employment tax. 

The new tax deadline applies to all federal income tax returns (and payments) due on April 15th, 2020.

Are there any taxes that the new deadline does not apply to?

If you or your business have a filing or payment date other than April 15th, 2020 this extension does not apply to you. The extension also does not apply to payroll and excise taxes or estate and gift taxes. For full details, consult the FAQs on the IRS website. 

Do I need to do anything differently to qualify for filing my taxes on the new deadline? 

According to the IRS, “taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.” Because this change impacts the deadline for all federal tax returns due on April 15th, 2020, there’s nothing you need to do to “qualify” for the new deadline. It is automatically applied. 

“Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.”

You may not need to do anything to qualify for the new deadline, but we recommend you make the most of it by using the time to maximize your deductions. 

What does this mean for my refund?

The IRS has not indicated that taxpayers should expect delays in refunds. In fact, IRS Commissioner Chuck Rettig “urges taxpayers who are owed refunds to file as soon as possible and file electronically.” Accepting tax returns and issuing refunds is considered “mission-critical” for the IRS and those operations are still up and running at this point in time. 

The sooner you file your return the faster you’ll get your refund. Keep in mind that e-Filing and using direct deposit is the quickest route to receiving your refund. 

Of course, the sooner you file your return the faster you’ll get your refund. Keep in mind that e-Filing and using direct deposit is the quickest route to receiving your refund. 

What if I had a tax payment due April 15th? 

If you had a federal income tax payment due on April 15th of this year, breathe easy. You can defer those payments without any penalties or interest to July 15th, 2020 no matter how much you or your business owes. Just like the new deadline, this deferment option is available to all types of taxpayers

What about estimated tax payments? 

Many businesses or self-employed people pay taxes using 4 installments or estimated tax payments. These payment deadlines are typically due April 15th, June 17th, September 16th, and January 15th (of the following year). 

While the April 15th deadline has been pushed to July 15th, the June payment date has not been adjusted yet. So the first estimated tax payment for 2020 will be due June 15th, then July 15th, and so on. 

What if I still need more time to file? 

Just like with the typical tax deadline, taxpayers and businesses still have the option to file for a deadline extension. If you’re an individual taxpayer you’ll need to file using Form 4868. Businesses who need an extension will need to use Form 7004. You will need to file for an extension by July 15th, 2020 to avoid any penalties. 

What about state taxes? 

It’s important to note that the shift in the federal tax deadline does not automatically carry over to state income tax. While many states have filed similar extensions, deadlines vary by state. For information on revisions to your state’s tax deadline, check out this guide from the Tax Foundation. 

“The shift in the federal tax deadline does not automatically carry over to state income tax.”

Conclusion

While the new tax deadline may spur a lot of questions, it’s important to remember that this change is intended to provide relief to taxpayers. Having more time to file and pay your taxes should provide some much-needed relief in a time of economic uncertainty. 

As the situation continues to evolve, the best place for up-to-date information on tax deadlines and questions is the IRS website

If you have questions about how COVID-19 is impacting Shoeboxed services, please visit our Help Center.