Many small businesses attempted to take advantage of the PPP for COVID-19 relief. Unfortunately, not all applicants fared the same, with some getting rejection notices shortly after applying. The good news is that even though you may have been rejected by the PPP, you do have some options to consider for economic relief.
1. Unemployment Benefits
Upon being rejected by the PPP, you must first turn to the next option available for Americans: unemployment. It is not only for your employees, but as a business owner, contractor, or freelancer, you have the option to earn unemployment benefits. Since a former employer is not verifying your employment, you will have to show the appropriate documentation that reflects your employment with your business and that you have been earning wages at that business.
2. SBA Economic Injury Disaster Loan
If you have a small business, you may be eligible for the SBA Economic Injury Disaster Loan that is available to sole proprietors, freelancers, and small businesses that have been affected directly by COVID-19 or another natural disaster. There is an application process that must be completed first. Since applications are currently being reviewed for approval, you will need to get that application in right away.
The loan is available for up to $2 million in recovery funds. It is recommended to apply for only what you need, as some loans are not being approved for this sum, but much smaller loans. The interest rate that is affiliated with this loan is 3.75% for businesses while non-profits have a reduced rate of $2.75 interest. These loans are flexible in their repayment terms, with the ability to stretch them from 15 to 30 years depending on the amount and the net profit generated by the business annually.
3. Employee Retention Tax Credit
Are you planning to retain your employees during the pandemic? If so, you may be eligible for the employee retention tax credit. This is being offered by the federal government when you file income taxes in the upcoming tax year. Any business that had to pay COVID-19 sick leave for their employees or ceased operations during the pandemic would be eligible for this tax credit. Unfortunately, this is not available for sole proprietors or contractors.
4. Opt for an SBA Microloan
There is some relief for those sole proprietors or freelancers who are rejected by the PPP. The SBA Microloan from the Small Business Association is designed to assist these specific types of small businesses with financial relief up to $50,000. If you are looking to apply for a loan now, there is an option for six months of payments covered when you are approved for one of these options.
5. Express Bridge Loan Option
If you currently have a lender or bank with an existing relationship, you can apply for an express bridge loan option with them that is capped at $25,000. These funds have been used to help cover payroll and other utility expenses for businesses affected financially by the pandemic. They are also available for other disasters that may happen and your business is affected negatively.
6. Community Advantage Recovery Loan
Small businesses that are already operating in an economy where they are overlooked can apply for the community advantage recovery loan. Eligibility comes to new businesses that have not been opened very long in that area. Also, the income demographic for the business’ location should be moderate-to-low, which boosts your application for business recovery. While this recovery loan is not the same limits as others, it does provide some level of support that will boost your business in the right direction after being rejected by the PPP.
7. Google Can Help
If your business was advertised on Google in 2019 through Google ads, your subscription can continue with free ads for small and medium-sized businesses. You do not have to reach out, they will be automatically applied to your account. Google is looking to help those businesses that were really hit hard during the pandemic and offering temporary advertisements to boost sales and generate leads for your business’ recovery. It is a cut in marketing and advertising costs to consider for your business.
8. Regional Support
Is your local city, county or state offering some form of support for small businesses? Many areas are offering local loans, support, and accommodations for their small businesses that were impacted by the pandemic. Reach out to your local leaders at all levels, seeking assistance, and see what programs are available for you. At the county levels, you may experience types of tax or license breaks that are deferred until a later date so that you can focus on rebuilding.
Your local Chamber of Commerce will have localized resources for small businesses of all industries. If you do not have resources in your immediate area, reach out to your local House of Representatives official. Their offices are often viable sources of information that are readily available for small business owners.
9. Industrial Grants
Due to the nature of the pandemic and the effect it has had on both the national and global economies, some industries are offering grants and programs to help small businesses keep the industry afloat in rural areas and low-income economies. These grants provide temporary relief to help cover expenses and costs that accumulated during the pandemic or could not be covered due to the business being closed. They are a great place to start if you qualify and can often be used in conjunction with other options.
What Options Will Work for You?
While getting rejected by the PPP can be a hard blow financially, it is essential to know that there are other options available for your small business. Even if you are still waiting to hear back from the PPP, you can still explore these options as alternatives to get your business on the road to recovery. Contact Silver Tax Group today for any tax-related assistance or guidance on what to do after being rejected by the PPP.