Financial institutions, law firms and accounting firms have been instrumental in their efforts to help small businesses owners navigate their way through the darkest days of the COVID-19 pandemic. The singular goal during that time? Survival.
While the current situation for businesses is a far cry from what it was pre-pandemic, for many, the focus can begin to shift to the future, from mere survival to seizing opportunities and striving to flourish once again. Today, the banks, law firms and accounting firms that helped business through the early days of the pandemic continue to provide key services and guidance to aid them in this transitional period.
Paycheck Protection Program (PPP) loans were a critical lifeline for many businesses during the pandemic, but the program’s expiration in May has certainly made finding proper COVID-19 relief a challenge.
One alternative is the US Small Business Administration’s (SBA) COVID-19 Economic Injury Disaster Loan (EIDL), which is still accepting applications until the end of December.
Robin Lefkowitz, executive vice president and director of business development and branch administration at Avenel-based Northfield Bank, tells New Jersey Business that the biggest question she’s getting from her business clients is if there will be any additional relief programs coming out.
“Some states still have some relief programs, and we hear that there may be additional programs [that could come out], but there is only so much information available,” Lefkowitz says.
On the bright side, she adds that a lot of the borrowing that is happening today is being approved as more businesses are qualifying for loans.
“If businesses can show decent numbers, even if they aren’t [that of a pre-pandemic level], there is a story that can be told and [the situation] is explainable, [due to the obvious effects of the pandemic],” Lefkowitz says.
“Most of our borrowers are at the point now where they seem to be doing better. Businesses are not overdrawing their accounts like they did, even in 2019. Although they are back to overdrawing more than they were in 2020, I feel that is not necessarily the nature of not having funds, but possibly having so much opportunity to make purchases and wanting to take advantage of some of the favorable credit rates right now,” she explains.
The biggest challenge remains the uncertainty of what is ahead.
“I don’t want to use the term good place because it’s not, but it seems like we are in a better place now than where we were,” Lefkowitz says.
A lesser-known form of relief for businesses is the Employee Retention Credit (ERC), which is set to expire at the end of the year. It was created in March 2020 to encourage businesses to keep employees on payroll.
“The ERC has become a significant source of refundable tax credits for pandemic-affected businesses,” says Matthew Walsh, CPA, MS, lead, SBA financial assistance services, at Princeton-based WithumSmith+Brown, PC.
Employers that were forced to suspend operations due to COVID-19 and those that experienced a significant decline in gross receipts are eligible for ERC, with qualifying employers able to claim up to 70% of the first $10,000 in pay and health benefits in each qualifying quarter. Small employers that received a PPP loan can also claim the ERC.
“To claim the credit, eligible businesses can withhold required deposits for certain payroll taxes – credits in excess of the businesses’ quarterly liability could either request a refund or a credit to be carried forward on their original, timely filed quarterly 941s,” Walsh says.
“The calculation of the ERC can be complex, especially when considering the period of eligibility, overlap with other federal programs, and determining which wages are deemed eligible for the ERC,” he continues. So guidance from a business’s accountant is helpful.
Editor’s Note: in its current form, the $1.2 trillion infrastructure bill, if signed into law, would move the deadline for the ERC from Dec. 31, 2021 to Sept. 30, 2021.
While many businesses look for relief from a financial perspective, those that are welcoming employees back into the office are faced with their own set of challenges.
From deciding on a vaccination and mask policy, to protecting yourself against a potential COVID-19 outbreak at the office, Patrick T. Collins, chair of the Labor & Employment Practice Group at Norris McLaughlin, says that employers need to be proactive and cover all their bases when taking steps to protect their employees and customers.
“Businesses should know what they are supposed to be doing. The difficulty is doing it, and making sure your employees are doing it,” Collins says.
It is important to write a clear policy that outlines what is expected from employees that come into the office, including if vaccinations or masks are required and what exceptions are allowed.
“[In terms of an outbreak], an employer can get into trouble if they fall outside the scope of what is acceptable safety,” Collins says. “If you are an employer and you are taking all the precautions that the government agencies are telling you to – if you have posters up telling people to wash their hands, if you are policing proper safety, and generally taking everything seriously – I don’t see how anyone can get in trouble beyond maybe filing a claim under workers compensation.”
He adds that the burden to prove negligence is also on patrons or visitors who may suspect they caught the virus at one’s business, which is certainly a difficult thing to do.
Collins says that so long as businesses are not outrageously negligent or completely disregard safety protocols, they can protect themselves from getting into trouble.
From navigating the complexities of the tax code, to securing critical financial assistance, to ensuring your business is protected from potential legal issues, professional service firms across the state are there to help. Those interviewed for this story all pride themselves on the relationships that they forge with their clients, and encourage business owners to pick up the phone and ask questions. During what is an overwhelming time, a simple chat can go a long way.
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