Best COVID-19 financial help and resources for New York business owners
Many businesses in New York City & State have been very negatively affected by the pandemic.
Here are the top resources available to help your business sustain itself in this very difficult time.
- Payroll Protection Program
- Economic Injury Disaster Loan
- Shared Work Program
- Employee Retention Credit
- New York Forward Loan Fund
Keep in mind that while various other programs exist besides the ones I mention, these are pandemic-specific.
If you need help with choosing the right program for you, feel free to contact us.
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Payroll Protection Program (PPP): Round 1
The PPP is an SBA-backed loan that helps businesses keep their workforce employed during the COVID-19 crisis. If you have not yet received a PPP loan, then you may still be eligible for the first draw of this program.
The PPP loan allows you to get a loan based on your average payroll costs. For example, if your average payroll costs were $20,000 per month, you may be able to get a $50,000 loan.
If you need help calculating it, feel free to contact us.
Keep in mind, when you get the funds, you need to spend at least 60% of it on payroll for forgiveness (and 40% can be spent on other expenses).
If you don’t use the funds for that, you wouldn’t qualify for loan forgiveness. But you’d still be able to pay it over five years at a very low interest rate.
Payroll Protection Program (PPP): Round 2
This only applies to businesses that have had any quarter reduction of 25% or more revenue compared to the previous quarter.
For example, they would take your revenue in 2020 for any quarter and compare it to your revenue in 2019 for the same quarter.
If any quarter had a reduction in revenue 25% or more, then you’d be eligible for the PPP round 2 loan.
The other rules are basically the same as with PPP Round 1.
You’d have 24 weeks to pay the funds, 60% or more of the funds must be used for payroll salaries and the rest for other expenses.
If you don’t do that, then you’d pay the loan off at a very low interest rate over five years.
Economic Injury Disaster Loan (EIDL)
Note: EIDL loans are currently available for up to $500K at the time this article was written (03/26/2021)
It’s a 30 year loan with a 3.75% interest rate.
For loans that are taken out now, it’s deferred for 18 months and you’d pay it over a period of 29 years.
What’s good about that is it’s kind of like a mortgage.
You get to pay it over a long period of time, and all the interest is tax-deductible.
Shared Work Program
One thing I typically see with small businesses is unemployment.
The Shared Work program allows employers to keep trained employees and avoid layoffs by allowing staff members to receive partial Unemployment Insurance benefits while working reduced hours.
Full-time, part-time and seasonal employees are eligible.
To get started, you’d contact an unemployment insurance department and see if you qualify for the program.
This program could help you maintain employees and set aside some anxiety about paying them, since they’re being paid with unemployment insurance.
Employee Retention Credit
This credit toward payroll tax of $5,000 is designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll.
But, the condition is that it has to be outside of the period of when you took a PPP protection loan.
New York Forward Loan Fund
New York State has a fund where they’ll provide working capital loans for businesses that have not gotten a PPP loan of $50,000 or more.
They’ll provide working capital loans up to $100,000.
So which program is right for you?
The short answer is it depends.
Everybody’s situation is unique.
I would suggest considering all your options and before making a final decision speak with a tax professional who’s familiar with helping businesses in New York City and state pay less in taxes.
If you want to learn more about how you can save thousands of dollars in taxes by making ONE simple change to your finances, check out this video here.