How are you? Take a step back and a deep breath. Ok, now tell us –how are you really feeling? Anxious? Stressed?
Completely understandable. COVID-19 has profoundly impacted small businesses across the globe. And for some of you, the impact may be financial.
Whether to provide your family with an extra cushion to wade out the upcoming weeks or to supplement the payroll of your rockstar mortgage team, the government is providing you with two sources of funds.
Mortgage Pros and Your COVID-19 Government Aid Package
Over the next three weeks, the government will be issuing stimulus checks to those that are eligible. According to IRS.gov, if your 2018 tax filing adjusted gross income is:
- $75,000 or less (for individuals) or
- $150,000 or less (for married couples filing jointly)
Then you will receive $1,200/$2,400 plus $500 for each qualifying child.
If your income goes above, then your funds will be reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Aid will not be issued to those with adjusted gross income above $99,000 (individual) or above $198,000 (joint) plus don’t have children that qualify.
Direct deposit seems to be the preferred payment distribution method, and the government will be going by the 2018/19 account information they have on file. So the fastest way to get your funds is to have completed your 2018 and 2019 taxes.
If the IRS does not have your account info, but you have done your taxes, you will likely receive your check by mail. The IRS has stated that they will roll out an online portal where you’ll be able to submit your bank info directly. However, as of the writing of this article, an exact date for the launch has yet to be released.
See full details on the official IRS website.
Mortgage Pros and SBA Coronavirus PPP Loans
Just a few days ago, the government signed a bill that will provide a nearly interest-free small business loan as part of the Paycheck Protection Program (PPP). This loan is specifically for businesses with less than 500 employees, was operating before February 15, 2020, and has proven that recent events have economically affected the industry.
The amount you qualify for is calculated by multiplying your average monthly payroll by 2.5 and is based on the prior 12 months of payroll costs. For example, if your average monthly payroll for the previous 12 months was $25,000, then you would qualify for a $62,500 loan.
Although the loan is primarily meant to pay employees (including yourself), you can use the funds for other business needs such as rent and utilities.
PPP Perks: You’ll have up to two years to pay it back, no payments are due the first six months, and there is no prepayment penalty.
Another option is the SBA Economic Injury Disaster Loans (EIDL). This loan is typically reserved for businesses that have been affected by natural disasters. However, it is now approved for businesses affected by the pandemic. EIDL also has low rates like the PPP loan. However, the primary differences are that the terms for repayment are longer, you can get more money, and there is more flexibility on what the funds can be used for.
See the official SBA website for complete details and remember to apply ASAP. There is only a certain amount of allocated funds for SBA loans, and we all know that the need right now is great.
Have you found this article helpful? Do you know another small business that this information might benefit them? Please share!
And please know that your LHP team is always working towards your benefit. Please, if there is anything we can do to help you transition to digital or otherwise assist you to succeed, let us know!