The deadline for companies to file their Paycheck Protection Program loan applications is June 30.
However, if business owners are unable to meet the deadline, or run a business that would not benefit from the program, there are other options available.
Here’s a look at what they are:
Economic Injury Disaster Loans
The SBA recently reopened its EIDL program, which had largely halted operations after it received a surge in applications earlier this year.
In order to qualify for an economic injury disaster loan of up to $2 million, a business must prove substantial economic injury — that it is unable to pay its ordinary and necessary operating expenses. The point of the loan is to help a business ride out a disaster period until normal operations can resume, and it applies to situations where there is no physical damage.
The interest rate is 3.75 percent and the term is 30 years.
These loans don’t have a forgiveness clause and require a personal guarantee.
Employee retention tax credit
Implemented as part of the CARES Act, the Employee Retention Tax Credit, is designed to incentivize companies to retain employees despite difficult economic conditions that have resulted from the coronavirus outbreak.
It is a fully refundable tax credit equal to 50 percent of qualified wages, including certain health care costs, paid between March 12 and Jan. 1, 2021, up to $5,000 per worker.
Employers can get immediate access to the credit by reducing employment tax deposits. If the employer’s employment tax deposits are not sufficient to cover the credit, the employer can get an advance payment from the IRS.
The credit is available only to individuals that have been affected by the coronavirus outbreak, which includes businesses that have either fully or partially suspended operations at some point or shown a significant decline in gross receipts.
Employers who receive aid through PPP are not eligible for this tax credit. The tax credit also cannot be combined with other tax credits.
Sick and family leave credit
There are a number of options available to help employees and employers when workers either contract the virus themselves or have to care for a loved one.
For example, an employee unable to work because he or she is caring for a child or someone else with COVID-19 is entitled to paid sick leave for up to two weeks at two-thirds of his or her normal pay. If the federal minimum wage is higher, the employee can receive that or any applicable state or local minimum wage, up to a maximum of $200 per day and $2,000 in total.
An employee who must care for a child because school or daycare is closed, or the caretaker is unavailable, can claim those same benefits for up to 10 qualifying weeks, for a maximum of $200 daily and $10,000 total.
Further, employers are able to receive a refundable credit in the full amount of the sick and family leave, in addition to health plan expenses and their share of Medicare taxes on the leave period. The credit is to be applied against employment taxes on wages. Advanced payments can be requested.
Eligible employers can claim both credits, but not for the same wage payments.