Exploring Financiable Options for Small Businesses Post-Paycheck Protection Program PPP Expiry

With the exhaustion of funds in the Paycheck Protection Program (PPP), many US small business owners are left pondering their next steps. While some may still qualify for the Employee Retention Tax Credit (ERTC) program, others are exploring alternative financing options. This article aims to provide a comprehensive overview of these alternatives, particularly emphasizing the benefits and constraints associated with each.

ERTC Program: A No-Compromise Option

Many small business owners remain unaware of the Employee Retention Tax Credit (ERTC) program. A key distinction between the PPP and the ERTC is that no repayment is required for ERTC benefits. This is crucial information for any business owner with five or more employees, as the ERTC does not come with the repayment obligations that the PPP did. Small business owners can apply for the ERTC within just 90 seconds at... Unlike the PPP, which required loan documentation and repayment, the ERTC is a direct tax credit that helps reduce the burden on businesses.

Businesses should strongly consider whether the ERTC is a better fit for their needs, given its simplicity and the lack of repayment concerns.

PPP Loan Forgiveness: A Temporary Solution

While the initial Paycheck Protection Program (PPP) may no longer be an option, some alternatives still remain. For instance, loan forgiveness through the PPP is one such possibility. Business owners who received a PPP loan can potentially have the loan forgiven if they meet certain conditions. These conditions include maintaining the same number of employees and compensation levels as when the loan was applied for, as well as spending the funds within 24 weeks. However, it's important to note that forgiveness is tied to specific compliance requirements, and the application process can be complex.

Another alternative is the Restaurant Revitalization Fund (RRF), which offers forgivable loans to restaurants impacted by the pandemic. Additionally, Express Bridge loans have been made available for businesses in declared disaster areas, and the Small Business Administration (SBA) continues to offer programs like the Economic Injury Disaster Loan (EIDL) and the Shuttered Venue Operators Grant (SVOG). However, these programs come with strict qualification criteria, which may exclude many businesses from obtaining the necessary support.

Home Equity Investment: A New Frontier for Small Business Finance

For small business owners who own a home, a new alternative financing option is emerging: home equity investments. Companies like Hometap offer cash investments to homeowners, enabling them to access funds quickly and without interest or monthly payments. This means that homeowners can use the funds for various business purposes, such as starting a new venture or expanding their existing business.

For instance, Michael, a Massachusetts homeowner, used a Hometap investment to expand his business. By leveraging this type of financing, small business owners can tap into a significant source of funding without the usual financial constraints.

If you are a homeowner interested in pursuing a home equity investment for your small business, you can request an estimate today.

Whether through the ERTC, loan forgiveness, the RRF, or other specialized programs, small businesses have access to a range of financing options. However, it is crucial to carefully evaluate each option to determine which best meets your business's specific needs.