If you are the owner of a small business, then you might be wondering about whether you’re eligible for one of those payments that many individuals are getting to jump-start the economy as a result of the coronavirus. The answer is that your ownership of a small business is beside the point. Essentially, what qualifies or disqualifies you from getting a check is the amount of your earnings that you reported to the IRS for 2019, or 2018 if you haven’t yet filed for 2019. If, as an individual, you made more from your business (or other sources) than $99,000, you are not eligible for a check.
This might come as bad news to you, especially if your business is now in danger of failing. However, there is another program of which you may be able to take advantage.
The Paycheck Protection Program
The Paycheck Protection Program, or PPP, is a loan program that is being put forth by the federal government to help small businesses from the potentially devastating effects of the pandemic. This is a loan to help you cover your payroll costs during this time of economic hardship.
To qualify, your company needs to have fewer than 500 employees. It must have been operating by or before February 15th, 2020. You also have to establish that the coronavirus has adversely affected your profit margin. For most businesses at the moment, that’s not a high bar to cover.
How Much Money Can You Get?
These loans can be up to $10 million, but you can request any amount under that which is based on your payroll costs. You are eligible for a loan of up to 2.5 times your average monthly payroll costs, which you can calculate by going back and looking at the last 12 months you were in business.