Key government loans and relief are still available

| October 26, 2020

Key government loans and relief are still available

The Advocacy Council wants to remind you that the federal government has established several loan programs to offset the financial impact of COVID-19 – some are still in place and have money to lend. Don’t miss these opportunities!

The Economic Injury Disaster Loans & Advance Program was developed in response to the COVID-19 pandemic. The Economic Injury Disaster Loan (EIDL) for small business owners and non-profit organizations is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. The loan can be used as working capital and for various operating expenses. Apply for a COVID-19 Economic Injury Disaster Loan and loan advance.

Small Business Administration (SBA) Express Bridge Loans

The Express Bridge Loan Pilot Program can supply funds (up to $25,000) to provide economic support to small businesses and was designed to work in conjunction with EIDL loans. They can aid cash flow due to a decrease in revenue or until funds from your SBA Economic Injury Disaster loan become available. If your small business has an urgent need for cash while awaiting distribution of EIDL funds, you may qualify for an SBA Express Disaster Bridge Loan.

SBA Debt Relief

If you recently received an SBA loan, you may be able to take advantage of this program. The SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504 and Microloans in regular servicing status as well as new 7(a), 504 and Microloans disbursed prior to September 27, 2020. This relief is not available for Paycheck Protection Program loans or Economic Injury Disaster loans. More information can be found here:

Tax Credits

Employers may be eligible for an employer retention tax credit, which allows for delayed payment of employer payroll taxes. An employer is eligible if:

  • your business is fully/partially suspended during the calendar quarter.
  • your business is fully/partially suspended due to government authority limiting commerce, travel or group meetings.
  • the first calendar-quarter reduction is more than 50% of the gross receipts compared to the same period the previous year. Eligibility continues as long as the employer’s reduction in gross receipts is more than 80% of the same calendar-quarter in the previous year.

Eligible business can receive a refundable tax credit of 50% compared to the same quarter in the prior year – up to $10,000 per employee. The credit is based on the qualifying wages of the employee paid from March 13, 2020, through Dec. 31, 2020.

Originally this payroll tax deferral benefit had certain limitations on those employers who receive SBA 7(a) Paycheck Protection Program loans. However, the Paycheck Protection Program Flexibility Act of 2020 signed by President Trump on June 5, 2020, retroactively removed the limitation on the deferment of such taxes after the forgivable portion of the loan. It now allows employers to take full advantage of deferment of the employer’s Social Security payroll taxes for wages paid between March 27, 2020, and Dec. 31, 2020, even if the employer received an SBA 7(a) Paycheck Protection Program loan and has all or a portion of the loan forgiven.

Another option allows employers to delay payment of a portion of their social security payroll tax (6.2%) for wages from March 27, 2020 through Dec.31, 2020. Fifty percent of the deferred taxes are due Dec. 31, 2021, and the remaining amount due Dec. 31, 2022.

You may find the AMA’s Physician practice financial relief guide very helpful in navigating the different loan programs available. You should consult your tax professional to determine which, if any, of these options are beneficial to your practice.

The Advocacy Council – we have you covered.