Rao: Cash is king for small businesses
Editor’s Note: Steve S. Rao is council member and former Mayor Pro Tem of the City of Morrisville and served as a board member of America’s New Economy, now the American Immigration Council. He also serves on the Race and Equity Task Force of the League of North Carolina Municipalities. Steve is a regular contributor to WRAL TechWire.
Over the past two years during this pandemic, we have seen many small businesses go through some very turbulent times. Like the blood that runs through our veins and keeps our heart beating, money is central to the life cycle of any small business.
When blood stops flowing to the heart, it stops.
When money stops flowing in a business, a business can die.
As we approach a new phase and hopefully the end of the pandemic, I continue to see restaurants, dry cleaners, movie theaters and other small businesses struggle to get back to revenue levels and to pre-COVID growth. In Morrisville, I spend much of my time visiting these entrepreneurs and also encourage our residents to shop locally and support our small businesses. Labor shortages are also hampering the growth of these small businesses.
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Help is available
Through the combination of ARP investments and existing emergency relief programs, the Biden-Harris administration has distributed more than $400 billion in critical relief to more than 6 million small businesses. ARP has also provided thousands of entrepreneurs with the personal and financial security needed to launch their own businesses. See www.sba.gov for more information on Small Business Relief.
Although PPPs, small business loans and other much-needed programs have helped struggling small businesses during the pandemic, many businesses continue to be frustrated by the difficulty of navigating cumbersome and lengthy financial reporting requirements. of these programs.
Like many businesses, I have attended numerous presentations by Mike Arriola, SBA Director for North Carolina, where he continues to remind our business community of SBA resources, including the payroll, restaurant relief program, emergency disaster loans. Powerpoint presentations and logging into websites still leave many businesses feeling like they don’t know where to start.
My good friend, former Greenville Mayor Allen Thomas, is now the Director of SBA Southeast, and I look forward to working with him to continue educating our small business community on resources to help them come back. to a profitable, growing and successful business.
The good news is that there is a promising program still covered by the CARES ACT that can really help small businesses with their cash flow situation, Employee Retention Tax Credits!
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WHAT IS THE EMPLOYEE RETENTION TAX CREDIT?
This program is not as well known as SBA programs because it is run by the IRS and is an often overlooked disaster recovery option. The ERC program offers companies up to $26,000 per W-2 worker employed in 2020 and 2021. Most companies that can show that COVID has affected them are eligible for ERC program money. Receiving PPP money initially excluded companies from the ERC program, but this has recently changed.
The application can be very complicated, so it is worth speaking to a specialist to make sure it is applied correctly.
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HOW TO QUALIFY FOR THE ERC PROGRAM
To qualify for the ERTC, your business had to have been affected in one of two ways.
First, a decline in gross receipts over a reported quarter.
In any quarter reported in 2020, a decline of 50% or more must be demonstrated to claim the credit; however, the credit is capped at $5,000 for the year. In 2021, the credit was expanded for businesses that only experienced a 20% reduction in revenue. For the first three quarters of 2021, businesses may be eligible for up to $7,000 in credits per employee.
Second, a “complete” or “partial” closure of your business. Across the United States, local government restrictions and mandates have been put in place; social distancing, being forced to work from home, or even shutting down your entire business.
In many cases, successfully applying to the ERTC program, like other SBA programs, can be a very cumbersome and time-consuming process. Also, for some reason, it’s disappointing that this program isn’t marketed as widely as other SBA programs.
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One of Triangle’s most successful entrepreneurs, Ken Romley, has made it his mission to help businesses learn more about this program through his new venture, UnclaimedCredits.com.
Romley started Unclaimed Credits with his partner, Tim Wicker, to make sure small businesses don’t miss out on the support they’ve been given. Too often, bigger, better-connected companies end up carving out the lion’s share of government benefits, and Ken and his team didn’t want that to happen with this program.
Ken and his team of financial experts have made it their mission to ensure that businesses that qualify for this program are sure to apply for and receive cash credits for their businesses. Ken has helped dry cleaners, restaurants and other businesses eligible for the program, received up to six figures of investment in their businesses.
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In a recent radio interview on my Leaders show on Radio Nyra, the largest South Asian radio station in the Triangle, Romley said:
“It’s great to help local small businesses not miss out on the benefits available through Employee Retention Tax Credits (ERCs). For example, in the last few months alone, we’ve earned over 12 million dollars for businesses in Goldsboro and surrounding areas. This is a giant leap in the arm of a local community, and our team takes pride in ensuring Goldsboro businesses get the support they deserve, and we at Unclaimed Credits look forward to providing the same support to businesses in Morrisville and beyond.
If more struggling businesses across the Triangle can achieve similar cash injections, our region and state can accelerate economic recovery as we move toward an end to the current pandemic and a post-COVID economy. Just as vaccines can immunize against the coronavirus that leads to COVID or other illnesses, the ERTC program can be the thunderbolt in the region that many North Carolina businesses need to survive and thrive.
Going forward, I intend to work with our Council and Chamber to invest our share of ARP dollars ($4.3 million this year) into more effective marketing of the Small Business Recovery Program to our small business community. More of these dollars need to be invested in counseling and counseling programs, to help them be more effective in applying for and receiving the help they would qualify for.
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