Editor’s note: Steve S. Rao is a Council Member and Former Mayor Pro Tem for the Town of Morrisville and served as a Board Member for the New American Economy, now the American Immigration Council. He also serves on the NC League of Municipalities Race and Equity Task Force. Steve is a regular contributor to WRAL TechWire.
Over the past two years during this pandemic, we have seen many small businesses experience very turbulent times to say the least. Like the blood that flows through our veins and keeps our heart pumping, cash is central to the life cycle of any small business.
When blood stops flowing to the heart, it stops.
When cash stops flowing through a company, a company 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 Pre-COVID revenue levels and growth. In Morrisville, I spend much of my time, visiting these entrepreneurs, and also encourage our residents to shop local, and support our small businesses. Labor shortages also are hindering the growth of these small businesses.
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. The ARP also provided thousands of entrepreneurs with the personal and financial security to launch their own business. See www.sba.gov for more information on Small Business Relief.
Although PPP, small business loans, and other much needed programs have helped struggling small businesses during the Pandemic, many companies continue to be frustrated with how difficult it has been to navigate through the cumbersome and endless financial reporting requirements of these programs.
I, like many companies, have attended many presentations by Mike Arriola, SBA Director for North Carolina, where he continues to remind our business community of SBA resources, including, Payroll Protection Program, Restaurant Relief Program, Emergency Disaster Loans. Powerpoint presentations and connecting us to websites still leave many companies feeling as if they do not know where to begin.
My good friend, former Greenville Mayor Allen Thomas, is now the SBA Southeast Director, and I look forward to working with him to continue to educate our small business community on resources to help them get back to a profitable, growing and successful company.
The good news is that there is one promising program still covered under the CARES ACT, that can really help small businesses with their cash situations, Employee Retention Tax Credits!
WHAT ARE EMPLOYEE RETENTION TAX CREDITS?
This program, is not as well known as SBA programs since it is managed by the IRS and is a business recovery option which is often overlooked. The ERC program provides businesses with up to $26,000 per W-2 worker employed in 2020 and 2021. Most businesses that can show COVID affected them qualify for money from the ERC program. Receiving PPP money initially excluded businesses from the ERC program, but this has recently changed.
Applying can be very complicated, so it is worth talking to a specialist to make sure this is applied for correctly.
HOW DO I QUALIFY FOR THE ERC PROGRAM
In order 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 declared quarter.
Over any declared quarter in 2020, a decline of 50% or more must be shown to claim the credit; however the credit is capped at $5,000 for the year. In 2021 the credit was expanded for businesses who only experienced a 20% reduction in revenue. For the first three quarters in 2021 businesses can be eligible for up to $7,000 in credits per employee.
Second, either a “Complete” or “Partial” closure of your business. All across the United States, local government restrictions and mandates were put into place; social distancing, being compelled to work from home, or even the closure of your business in its entirety.
In many instances, successfully applying for the ERTC program, like other the SBA Programs, can be a very cumbersome and tedious process. Also, for whatever reason, it is disappointing that this program is not marketed as extensively as other SBA programs.
New company led by Triangle entrepreneur can help
One of Triangle’s most successful entrepreneurs Ken Romley has made it his mission to make it easier for companies to learn more about this program through his newest venture, UnclaimedCredits.com.
Romley started Unclaimed Credits with his partner, Tim Wicker, to make sure that small businesses didn’t miss out on the support that was allocated for them. Too often, larger, better connected businesses end up getting the lion’s share of government benefits, and Ken and his team did not want to see that happen with this program.
Ken and his team of financial experts, are making it their mission that companies who qualify for this program to not miss out on applying and receiving cash credits back to their companies. Ken has helped dry cleaners, restaurants, and other qualifying companies for the program, received up to six figure investments back into their companies.
In a recent radio interview on my Leaders show on Radio Nyra, the Triangle’s largest South Asian Radio Station, Romley stated:
“It is great helping local small businesses not miss out on the benefits that are available through the Employee Retention Tax Credits (ERC). As an example, in just the last few months we’ve gotten over $12 million for businesses in and around Goldsboro. That is a giant shot in the arm for a local community, and our team has been proud to be a part of making sure that the businesses of Goldsboro got the support they deserve, and we at Unclaimed Credits are looking forward to providing the same support to businesses in Morrisville and beyond.”
If more struggling companies, across the Triangle, can achieve similar injections of cash, our region and state can accelerate economic recovery as we move toward the end of the current pandemic, and a post-COVID economy. Just as vaccines can immunize against the coronavirus that leads to COVID, or other diseases, the ERTC program, can be the shot in the are that many North Carolina companies need to survive and thrive.
Moving forward, I intend to work with our Council and Chamber to invest our share of ARP dollars ($4.3 million this year) in more effective marketing of Small Business recovery program to our small business community. More of these dollars need to be invested in counseling and consulting programs, to help them be more efficient in applying for and receiving assistance for which they’d qualify.