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Ask The Expert: Small Business COVID-19 PPP Loans and Taxes
Coronavirus continues to impact small businesses. To help sustain small businesses, the Small Business Administration has launched a second draw of the Payment Protection Program (PPP) loans. Are you thinking about applying for the second round? Already applied? Or, do you have questions about filing your small business taxes from the first round of loans received?
Join us February 8-15, to get your questions answered by Roderick (Rod) Johnson (RoderickJ614381), SBDC Project Officer of the Small Business Administration (SBA), a lending specialist and AARP Expert, Felicia Brown (@FeeBrown). Take advantage of this special program and learn how to navigate the tax implications to help you prosper in 2021
Stop worry about taxes and be concerned about growing revenues, managing your company's expenses and showing a net profit! As I stated in an earlier post, 80% of businesses fail within 5 years due to poor planning (lack of a well thought out business plan), lack of management expertise, lack of seed capital, and no real demand for the product or service.
Just understand this about taxes. They will go up to fund the trillions of dollars we are spending on Covid19 to keep businesses afloat. We all in 2022 and beyond will bear the burden of higher taxes
Good afternoon. How many of the women and minorities have applied for PPP and EIDL this week and today? How many of you have filed your 2020 business tax returns already? To get a new loan, how many have your 2018, 2019, and 2020 business tax returns, your 2018, 2019, and 2020 personal tax returns ready, how many have completed a personal financial statement for 2021, do you have your accounts receivable and payable aging reports as of 12/31/2020 ready. All this information is needed to apply for a new commercial loan from a bank or credit union. The PPP, EIDL, State and Local loans and grants are out there for you to take advantage of. Go get the money. You can get help from Score, the Small Business Development Centers, the Women Business Centers, and the Veterans Centers. Go get free assistance. How many of you have applied for forgiveness from the first round of PPP?
It's Day 3 and I hope you have this conversation to be engaging and informative. Remember, we are here for you. We want your questions, hear about your experiences, and hopefully preparing you to start or take your business to the next level.
We have with all week @RoderickJ614381 from the SBA who is knowledgeable about all things small business lending. He is here for you. Periodically, you will hear him sharing information and chatting about loans. Don't be afraid to ask him questions.
So, @RoderickJ614381 to kick us off, are there any myths business owners have about applying for loans?
I hope everyone is listening to @RoderickJ614381 he is encouraging under the sound of his voice to "go get the money". There is out there especially for minority owned businesses. We know many struggled this past year and the SBA is working with local funders to make more money available.
Need a new business loan and you are in Washington, D.C. and want to bank with an 87 year old community bank? Call Tina Carter at Industrial Bank at 202-722-2000. Let her know Rod Johnson sent you.
Bank with Richard Cole at the Northwest Federal Credit Union 703-709-8900 x4268 if you want a small friendly credit union in Northern Virginia. Tell him Rod Johnson sent you.
If you are in Prince George's County and want to bank with a small friendly credit union call Diane Brown at 202-467-7245.
Go get the money from your local bank wherever you are located
As an U.S. SBA employee I can only state that as a business owner, you have to research what your state and local governments are offering in terms of small business loans and grants. I only work with Federal government programs, which are the PPP and EIDL. EIDL is a loan with a maximum of $150K at 3.75% for for profit organizations and 2.75% for nonprofit organizations. For loans over $25,000, the SBA will take a blanket lien on the business assets. The first 12 months of the loan is deferred. However, interest does accrue during that 12 months. The money is to be used for payroll and business expenses (rent, lease, interest on a commercial mortgage, internet, cell phone, business phone, software, ). The EIDL loan is being targeted to businesses located in low to moderate income areas. For information on PPP and EIDL loans please go to SBA.GOV or SBA.GOV/PPP.
Now is the time to apply for a SBA 7A, 504 or Micro Loan to grow your business. You the borrower do not pay an SBA fee for any of those products. The bank receives a 90% guaranty from the SBA for loans up to $5MM. For the SBA Express, the bank receives a 75% guaranty for loans up to $1MM. Go get the money from your local bank!
I am loving the questions. Keep them coming. First, get free assistance from Score, the local Small Business Development Center near you, a Women's Business Center near you and the Veterans Business Center near you is how you find out about loans of all types. I cannot say enough all you need to know about business is to go to SBA.Gov.
These tax questions keep coming about PPP and EIDL. There are no tax questions business owners need to ask their CPA as they regard the two loans. Its very simple: a business has revenue, their are expenses associated with running the company that will show up on the income statement. Again if there is a net loss, there are no taxes to pay. If there is a net profit, you will pay taxes that. The amount of taxes paid is determined by how much a net profit is shown and your business structure. PPP and EIDL is not about taxes or tax planning. The programs are designed to give your company an infusion of cash to maintain your business.
It's day 2 of our conversation with @RoderickJ614381 our lending expert at the SBA. Again, he's sitting with us this week ready to answer your questions all things loans.
To kick us off, @RoderickJ614381 for someone just launching their business what suggestions do you have as it relates to funding their business?
Welcome to our first day of talking all things small business lending, particuarly as it relates to the latest draw of the PPP and taxes. All week we have a guest from the SBA, @RoderickJ614381 who is a lending expert. He his prepared to answer all your questions.
To kick us off, @RoderickJ614381 can you tell us about the latest PPP loans? How do you apply? What can you use the money for? How much can you access for your business? What about other loans if someone does not qualify for the PPP?
Hi: I want to encourage all women and minority owned companies get a portion of the $284 Billion dollars that Congress approved for small businesses. Right now there is approximately $200 billion left. The program ends March 31, 2021 or when the money runs out. How many women and minority owned companies have applied for the EIDL or PPP loans to sustain your business? If you have not applied why not? Do you need assistance? Go to your local financial institution to get the money now:-).
Do you know that CDFI's and Community Banks were open January 11, 2021 -January 15, 2021 only for minorities to receive first dibs on the money? EIDL money now is being targeted for businesses located in low and moderate income areas. There is $40 billion set aside for minority owned businesses. Go get the money!
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