Below is a brief summary of how the new $2 trillion stimulus package can help small businesses.
- Unlike other SBA loans, owners do not have to put up collateral or personally guarantee the loans. They also are not required to search for a loan elsewhere before applying for the SBA loan.
- Interest rates cannot exceed 4%, and the maximum loan amount is $10 million.
- Part of the loan can be forgiven. Costs related to payroll, including health care, mortgage or rent and utility payments incurred in the eight weeks after you receive the loan can be deducted from the loan amount and not repaid. However, if you reduce your headcount at that time, that will also decrease the amount of loan forgiveness. Adding headcount will increase the amount forgiven.
Independent contractors’ wages can be included as employee payroll costs in the loan, according to the Chamber of Commerce.
- The bill includes a payroll tax holiday. Owners have until 2022 to pay 2020 payroll taxes but will need to pay 50% by the end of 2021.
We encourage you to do additional research and download this resource: Understanding the Historic 2 Trillion Stimulus Package.
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