Finance4Biz

[finance4biz]

Restaurant Revitalization Fund(RFF)

The US Small Business Administration (SBA) provides fund though the Restaurant Revitalization Fund(RFF) to restaurants, bars, and other places of business that serve food or drink who suffered revenue losses related to the COVID-19. It is about $28.6 billion for SBA to award funds and SBA will prioritize awarding funds to the small business owners who women, veterans and socially economically disadvantaged individuals.

The funding amount would be the decreased revenue of 2020 from 2019 and subtract the PPP you already received. The fund has to be used with guideline, you need to report annually on your portal. You must use all the fund appropriately by Mar 11, 2023. Unused fund has to be returned.

You can apply now, contact your accountant for questions. You can click the link for the SBA RRF guideline.

Restaurant Revitalization Fund

This program provides emergency assistance for eligible restaurants, bars, and other qualifying businesses impacted by COVID-19.

<Eligible Uses of Funds>

-Payroll costs

-Rent or mortgage for your business location

-Business debt payments, but prepayment is not included

-Business utilities

-Equipment or renovation

-Construction on outdoor seating

-Business supplies

[finance4biz]

Tax Write-Off Benefit: Tax deductible for 100% paid interest!

Sometimes I find that some of my clients do not write off the interest they paid when they file taxes.

You can deduct 100% of paid interest when filing taxes. But it's not an automatic process, you need to provide the document to your tax accountant.

I've been helping my clients to get their payment history statements and transaction summary. However, you need to contact me and ask for it.

- 100% Tax Deductible on Paid Interest!

- Tax deduction can be more important than interest rate!

-  I can help you to get the payment history statements

-  Build your business credit lines

-  I would like to help your business to grow

[finance4biz]

2nd Round PPP (Paycheck Protection Program)

SBA (Small Business Administration) announced that the 2nd round of the Paycheck Protection Program (PPP) starting Jan 11, 2021 this week. The major banks and lenders who facilitate PPP will start taking applications this week or next week.

You can apply to the same lender that you received the first PPP or any qualified banks near you. Or I can help you to apply online directly. There is no fee on PPP.

-PPP Loan Amount: average monthly payroll X 2.5, X 3.5 for restaurants

-Forgivable loan if you use it for payroll and rent

<Qualifications for 2nd Round>

-No more than 300 employees

-Proof of over 25% reduction in revenue from 2019

-More detail info on PPP, click the link for the SBA website,

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

[finance4biz]

Business loans and your credit, How to maintain good credit

So many business owners use their personal credit cards for their business expenses without thinking or planning.  If you max out your credit limit, your credit score drops at least 100.  And it gets worse if you cannot make your minimum payment.

Keeping good credit is essential for great business loan programs.  It’s smarter to use any business type of financing for your business expenses because you can write off 100% of interest and build your business credit.

I would like to let you know about the common misconceptions on business loans and your credit, and some tips on how to maintain good credit.

-Business loans you’ve received will not be on your personal credit report unless you defaulted

-Personal credit cards you’ve used and personal loans will be shown

-Business financing lenders have a right to file UCC(Uniform Commercial Code) on your loans

-Most financing lenders are still using “fico” for personal credit score

-Fico has several versions such as 2,3,4,5,8,9...  So they may have different scores

-There are 3 bureaus who collect data for your credit use:

        EQUIFAX / EXPERIAN / TRANSUNION

                                         How to Maintain Good Credit:

-Use 2 or 3 credit cards to maintain good credit

-Leave under 15% monthly balance and pay off the rest on time every month.  It helps to increase  your credit limit faster

-Most important elements to determine the fico scores:

1. Payment history

2. Amount you owe vs your credit limit

3. Length of credit history. Longer the better

-Check your credit regularly from 3 credit bureaus Equifax, Experian & TransUnion

-If you see something wrong, you can write to each bureau

-Hard credit pull(inquiry) will lower your credit score, but soft credit won’t hurt your credit

[finance4biz]

EIDL Restrictions (Economic Injury Disaster Loan)

EIDL is a SBA loan for businesses that have suffered from major storms, droughts and other federally declared disasters such as Covid-19.

A lot of business owners got EIDL for Covid-19 with 3.75% APR for 30 years term.  It seems like a life time opportunity for a business loan.

However, there are several restrictions.  If you violate any restrictions, you cannot avoid the civil penalty and criminal penalty too.

So consult your lawyer before you spend it.

<Restrictions>

-No personal expenses paid by the business entity for its owners

-No payment of any dividends or bonuses paid to its owners

-No disbursements to owners, partners & stockholders

-No repayment if stockholders/principal loans

-No expansion of facilities

-No acquisition of fixed assets

-No refinance of long term debt

-No paying down or paying off loans

-No paying penalties resulting from noncompliance with a law, regulation or order of federal, state, regional or local agency

-No relocation

*** For more detailed information, click the link below for the article from Forbes

 https://www.forbes.com/sites/alangassman/2020/07/28/many-eidl-loans-will-cause-disaster-for-unassuming-borrowers/?sh=420afbb53049