The COVID-19 pandemic has made it extremely difficult for several businesses to pay employees or rent. Some may have even resorted to closing their doors or cutting staff. If you're involved in the field services industry, your company has likely been impacted negatively. Fortunately, the federal government is working on helping small businesses engaged in the field service industry during this challenging time.
If you are operating a business in field service legally identified as a small business, the Paycheck Protection Program (PPP), which is part of the $2 trillion CARES ACT may be a financial relief resource. Acceptance into the (7) Paycheck Protection Program has already provided several different loans out with a value of up to $10 million.
Understanding PPP Paycheck Protection Program SBA Loans for Field Service Companies
By utilizing 100 percent guaranteed PPP Paycheck Protection Program SBA loans, you may get the cash you need to help to pay for important expenses. This monetary assistance may be highly instrumental in helping your company if you offer pest management, plumbing, and HVAC services (or any other specialty field service solution) and are currently affected by the challenges surrounding the COVID-19 outbreak. Loan forgiveness may also be available for the use of funds. Thus, you may not have to plan for future financial liabilities relating to PPP loans.
Terms for the Loan Amount and Period Covered
The loan amount you might receive if you are notified of acceptance is a maximum of $10 million. The fixed-rate loan won't be any higher than 4 percent, and you should not have to worry about any type of fees. The PPP may provide you with a loan equal to 2.5 times your average monthly payroll cost for the prior 12 months.
Determining Eligibility for Field Service Companies
You need to meet specific requirements for (7) Paycheck Protection Program eligibility in order to qualify for money. The criteria for receiving a loan requires you to have been operating before February 15, 2020. You must also meet one of the following conditions:
- Be a nonprofit with less than 500 employees
- Be a business with less than 500 employees
- Be self-employed
The use of funds must be for specific items, which include:
- Other debt or mortgage interest that originated before February 15, 2020
- Payroll costs (these may include payroll tax, health insurance premiums, sick leave and retirement benefits)
The first wave of $349 billion allocated for the PPP has been depleted. The next round is coming soon. $310 billion has been proposed at the amount to be provided for the second round of loans. Legislation on this is still pending, but it should be approved by Congress and President Trump by the end of April.
The banking institution issuing you the funds has to be verified by the Small Business Administration as a lender. You also may need to supply your payroll costs and a copy of last year's tax return to qualify.
Tax-Free Debt Forgiveness Is Available
Tax-free debt forgiveness is available with this loan, which may make it extremely helpful if you are a field service company that is struggling to pay your HVAC technicians or landscaping specialists. The United States government usually taxes loan forgiveness but is offering these options because of these unique circumstances. We at Fusion CPA are knowledgeable of the PPP program and its regulations and benefits. Our small business accountants serve to provide assistance to you throughout the process of applying, determining eligibility, and optimization for loan forgiveness. We have the resources to quickly respond to your needs. Contact us today at 404.955.7338.
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