The government offers many programs to help small businesses succeed. From loans and grants to tax breaks and small business health insurance, there are several ways the government can assist small businesses.
In this article, we’ll discuss some of the key ways small businesses can benefit from government assistance, beginning with employee retention credit, which was something there was eligibility for during the Covid-19 pandemic. It is well worth finding out about eligibility and the ertc application needed to complete the claiming process.
Defining a Small Business
First of all, we should define a small business as this is important to eligibility and being able to apply for many forms of government assistance.
To qualify for government assistance, small businesses must meet the definition set forth by the Small Business Administration (SBA). Generally, small businesses are classed as having 500 or fewer employees. Furthermore, many small business programs require you to be in business for at least two years before applying.
Employee Retention Credit
Employee Retention Credit (ERC or perhaps ERTC) is a refundable tax credit designed to help small businesses that have been impacted by the Covid pandemic. The ERC provides employers with up to 50% of wages paid per employee and can offset some of the costs associated with keeping employees on staff during difficult economic times.
Although the period has passed, it is still possible for small businesses to still claim this credit retrospectively. It is something that can make a significant financial difference when a company employed a lot of staff despite technically being classed as a small business.
During the worst of Covid, many businesses that relied on members of the public visiting them suffered in terms of lost income. This included, in particular, hospitality venues and retail. These credits are still due if businesses now chase this up with the help of those who know.
Health Insurance Tax Credit
The small business health insurance tax credit is another way small businesses can benefit from government assistance. Businesses with fewer than 25 full-time employees and average wages of less than $50,000 are eligible for the small business health insurance tax credit. This credit helps small businesses offset some of the costs associated with providing health insurance to their employees.
Employing someone goes beyond just their initial wage. More staff can be employed when there is assistance toward some of the costs involved in employment. These expenses cannot be ignored but can be reduced with government assistance.
Small Business Loans
The Small Business Administration (SBA) offers small business loans to help small businesses cover operating costs, purchase equipment or inventory, and more. These loans are available at competitive interest rates and can be used for a variety of purposes.
It can be difficult for some businesses to obtain a bank loan or to afford the rates, so this is where the government can assist with that. Favorable rates make them affordable in difficult circumstances. This extra money can make a difference when it comes to keeping a business running when there are costs that are still incurred despite very little income being generated. These fixed costs become problematic unless there is some kind of extra funding. The government recognizes this and wants businesses to survive because of the staff they employ, so is willing to help.
Tax Breaks
The government also provides small businesses with tax breaks to help them save money. These tax breaks can be used to offset the cost of employee benefits and small business investments, etc.
Small businesses can take advantage of a variety of government-sponsored credits and tax breaks to help them stay afloat, even post-pandemic. Economic times are just as difficult in many ways and so anything that can be claimed should be considered when it can aid today’s survival.
