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American Rescue Plan Act of 2021

This article is only for educational purposes and does not constitute legal, financial, or tax advice. Make sure you consult a professional regarding your unique business needs.

Hey BFF’s

Last week President Biden signed the American Rescue Plan Act of 2021 – a $1.9 trillion economic relief package.  This bill provides additional relief for families and businesses on a grander level. Not only does it offer a third round of stimulus checks, but it’s providing assistance to small businesses including restaurants (for the first time), student loan forgiveness is tax–free through 2025, extended unemployment benefits, and much more.

Stimulus checks, where are you?

Stimulus checks are on the way. Or maybe you already received yours. The question is how are you going to spend it? I’m normally telling you to save, invest, and donate. This go-round, I’d like to switch it up a bit. I still want you to save, but I also want you to spend. The purpose of the stimulus checks is to help stimulate the economy.

How Sway?

The more we spend within our communities the more we can help revive them. Small businesses have suffered the most due to the pandemic. If you have not built emergency savings for you and your family, fund it first. At a minimum, you should have $1,000 saved for each person in your household.

If you already have your emergency fund(s) aligned:

  • Save 50% – 50% of all funds. Not just the funds allocated to you. If you are a family of four you may receive up to $5,600 and you should save $2,800.
  • Enjoy 40% – Do something exciting with your family. You deserve it. Take a safe vacation or staycation and have fun! Treat yourself to something new, go out to dinner, and most importantly support your local mom and pops small businesses. They are relying on us.
  • Remaining 10% – Donate. Yes, find a local charity or break it into smaller bills and randomly bless as many people as you can, until you run out.

Small Business Relief

The Small Business Administration received additional funding for two existing relief programs. The Paycheck Protection Program, which is expected to expire March 31, 2021, received additional funding of $7.25 billion to support the initiative. Economic Injury Disaster Loan Program received $15 billion.

Also, the American Rescue Plan Act allocated $28.6 billion to launch the “Restaurant Revitalization Fund,” which will be managed through the SBA. Eligible entities include restaurants, food trucks, bars, caterers, lounges, with less than 20 locations and not publicly traded entities. Money received can be used to cover payroll costs, paid sick leave, utilities, maintenance, rent and mortgage payments, food and beverage expenses, and other authorized costs.

The SBA will provide priority access to minority-owned, women-owned, and veteran-owned businesses. I recommend preparing now. Make sure you are registered with the government so they can recognize you. Have your Duns & Bradstreet number handy. It is free to acquire. After you receive it you want to register your business with the government at SAM.gov.

If you received the PPP loans they will count as revenue. EIDL (economic injury disaster loan) and ERTC (employee retention tax credit) will not.

Student Loan Forgiveness

Before the American Rescue Plan Act of 2021, student loan borrows would be taxed on the portion of their debt that was forgiven by the government. For example, if you are on a student income-repayment plan and you made your last payment of $250 to get $50,000 forgiven. You would be taxed on the $50,000 because it counts as earned income. Under the new act, you will not be burdened with a massive tax bill. Sounds great to me.

Unemployment relief

Through the Federal Pandemic Unemployment Compensation (FPUC) program the additional $300 a week, which was supposed to end on March 14, 2021, has been extended through September 6, 2021.

The Pandemic Unemployment Assistance (PUA) program is geared for employees who may not qualify for traditional unemployment insurance. This program was scheduled to end on March 14, 2021 and has been extended through September 6, 2021.

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Small Business – PPP

This article is only for educational purposes and does not constitute legal, financial, or tax advice. Make sure you consult a professional regarding your unique business needs.

 

Hey BFF’s

Small businesses make up a vast majority of U.S. businesses. Unfortunately, these businesses have been hit extremely hard by the pandemic. Specifically, minority-owned businesses. Roughly 70% of small businesses without employees are Black-owned, Latino-owned, or women-owned.

I know the struggle has been real and you’re doing your best to keep your business open and a roof over your head. Chile, do I have great news for you! The Biden-Harris administration has increased lending to small businesses in need. Yes, there’s money for the little guys and girls.

The SBA is currently offering PPP (Paycheck Protection Program) loans to businesses with less than 20 employees. Whether you are a beautician, travel agent, barber, small independent retailer, sole proprietor, independent contractor, or self-employed, this is a fantastic opportunity for you and your business. The calculations are in your favor to get additional funding, and you do not have to be located in low-and-moderate income area.

Here is the best part, the Small Business Administration filled a ruling to allow individuals to use their gross income to calculate their loan value and they are removing the student loan delinquency restriction. Do you know how fantastic this is? Your gross income is generally higher than your net income. It allows for businesses that were affected by the pandemic to qualify for greater loans. Cha-ching *The gross income equals the total you earned before taxes and deductions. Net income refers to your income after you’ve paid taxes and deductions*

What does this mean?

It means you may be eligible for a loan even if your business did not make a profit at the end of the year.

What do you need to apply?

Depending on the institution you submit your application to, there may be slightly different application requirements. However, your eligibility, forgiveness, and terms of the loan will remain the same. Read the fine print to ensure you are meeting all requirements.

  • Must have been in business before February 15, 2020.
  • Must have filed taxes in 2019 or 2020.
  • Locate your Schedule C 1040 tax form (for self-employed entrepreneurs).
  • If you are a freelancer have your 1099 handy.
  • Lawful U.S. residents must use their ITIN (Individual Taxpayer Identification Number) to apply
  • Pass SBA fraud check.

What can I use the PPP loan for?

  • Payroll – your salary, wages, commission, and/or tips
  • Operation costs – software or cloud computing services
  • Worker protection expenses – mask, plexiglass, gloves, etc.
  • Mortgage interest payments – does not include payments on the mortgage principle
  • Property damaged – if caused by public disturbances in 2020
  • Rent
  • Utilities

There is a short window of opportunity to apply. The application processed started Wednesday, February 24th, and closes Tuesday, March 9, 2021, at 5 pm eastern standard time.

This is not something you want to procrastinate with. Go online and apply now. I recommend starting an application with the financial institute you currently have your business or personal checking/savings account linked to.

Remember, having a registered business is not a requirement. If you are a 1099 employee this is for you also!

Ok, that’s all I have friends! Best of luck with the application process. Read the fine print before you submit.

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Targeted EIDL Advance & PPP Loan

Hey BFF’s

 

I’m not about accruing extra debt; however, I love, and I’m for free money!

Disclaimer – Although I love free money and want you to have free money; we need to ensure we’re not being greedy. There are plenty of businesses in 2020 that truly needed the additional funds and unfortunately,  people were scamming. As a result the grant money dried up by mid-July. If you’ve been able to sustain your business and are not struggling, this is time to give grace to your fellow entrepreneurs. If you need the money, apply. If you don’t, leave it for the business that truly need it.

Targeted EIDL advance

Congress has released $20 billion in additional assistance for small businesses which includes a new EIDL (Economic Injury Disaster Loans) grant called the “Targeted EIDL Advance For Small Business Continuity, Adaption, and Resiliency.” The qualifications of the new grant are a little different than the previous one released in 2020.

Before we get into the qualifications I must share, if you received the full $10,000 last year you are not eligible this year. If you received a portion last year, they would deduct what you received from the $10,000 and give you the difference. For example – you received $3,000 in 2020 you are only eligible for $7,000 in 2021.

Let’s see if you qualify- 

  • Are you located in a low-income community?
    • According to section 45D(e) of the internal revenue code of 71986 – A Low-income community is defined as 1) median household incomes at or below 80 percent of the statewide median income, or 2) median household income at or below the threshold designated as low-income by Department of Housing and Community Development’s State Income Limits under to the Health and Safety Code Section 50093.
  • Suffered economic loss greater than 30%, and
  • Employ less than 300 employees

Also, your business must be an eligible entity defined in the CARES Act:

  • A small business, cooperative, ESOP Tribal concern, with fewer than 500 employees
  • An individual who operates as a sole proprietorship, with or without employees, or as an independent contractor; or
  • A private non-profit or small agricultural cooperative.
  • The business must have been in operation by January 31, 2020
  • The business must be directly affected by COVID-19

Did you know?

EIDL grants are not taxable. Therefore, your business still qualifies for a tax deduction on qualified expenses. If you applied last year and did not receive funding because it was drained, the SBA will be required to reach out to you, and you may be able to apply for the full $10,000.

How to apply?

Chile, I have no idea! The SBA has not released guidance, but when they do, I’ll be sure to let you know, ASAP.

PPP – Part 2

The newest PPP (Payment Protection Program) loan option is available now. Ok – the great thing about the loan is that it comes with a low-interest rate. Friends….DO NOT apply for a loan you cannot afford to pay back. Grants equal free money, loans you must pay back with interest.

The PPP loans are for qualifying payroll and non-payroll expenses. The loan may be partially or fully forgiven if funds are spent on authorized expenses between 8 and 24 weeks after loan disbursement (you decide the timeframe). The loan is geared to help with payroll (salaries, wages, commission, hazard pay, state and local taxes). Total payments for payroll may be forgivable. All other expenses are also forgivable, up to 40%.

To ensure you receive the maximum amount of loan forgiveness make sure you keep track of your expenses and spending, as you will have to prove how you spent the funds to your lender.

Click here to apply.

Ok, that’s all I have friends! Let’s keep your businesses thriving.

Don’t forget to like, share, and follow us on IG @_CompletelyUnbothered

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Women Owned Businesses

Hi BFF’s!

Do you have a business that is majority women-owned? If so, I have excellent news for you. There are various grants and loans that are available to you, that you should take advantage of to grow your business. 

The Red Backpack Fund, backed by Sara Blakely, is a great opportunity. They are giving away $5,000 grants to 1,000 women-owned businesses.

There are a few stipulations:

  • 51% of the company must be women-owned
  • Total revenue is less than $5 Million for the past three years
  • You have less than 50 employees
  • You withheld payroll taxes for at least one (1) employee including yourself
  • Your business must be registered with the USA, in good standing, and a valid Employer Identification Number (EIN)
  • Applicant must be over 18

The application process opened today, July 6, 2020, and closes July 13, 2020, at noon, ET. If you miss this opportunity, you have one more chance to apply August 3 – 10, 2020. Please note, you may only apply to one cycle. 

When you apply, make sure you review the site for all the requirements. Doing so will ensure your application is better than the next. 

To apply, go to www.globalgiving.org/redbackpackfund/ 

Best of luck! 

Welp friends, that’s all I have today. Don’t forget to follow me:

IG @_FinanciallyUnbothered

 

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