In an effort to ease the financial burden of the pandemic, Congress authorized the Paycheck Protection Program (PPP) as part of the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Employers who took advantage of this popular program enjoyed the opportunity to obtain loans with favorable terms and the possibility of forgiveness — provided they kept employees on the payroll.
Unfortunately, the Small Business Administration stopped accepting PPP applications. Organizations such as the American Institute of Certified Public Accountants have advocated for a second edition of the program, but until then, many businesses will be left to fend for themselves. Thankfully, a few alternative options exist. These are among the most promising:
Economic Injury Disaster Loans
An appealing option involving low-interest rates, this top alternative bypasses prepayment penalties while providing terms of up to thirty years. It obviously falls short of the PPP by failing to provide forgiveness, but in a pinch, this program can be relied upon to get businesses and non-profits through difficult times.
Main Street Lending Program
Launched in June, this revolutionary program encourages lenders to assist small and midsize businesses that thrived prior to the pandemic. Loans available through this option can be paid back within five years. Deferrals may be available for interest and principal payments.
Traditional Small Business Loans
Although difficult to obtain in today’s economic environment, the traditional small business loan remains a viable option in some situations. Lenders may require significant evidence of a company’s viability in these challenging times, but some may be willing to work with businesses that show potential. While traditional loans offer few of the advantages of the PPP and other programs highlighted above, they’re worth considering.
On the hunt for viable solutions that will help you handle payroll while keeping your tax burden to a minimum during the COVID pandemic? Our team at the Highland Tax Group can help. Reach out today to learn more.