Unlock Your Employee Retention Tax Credit Funds Faster with Swift SBF's ERTC Loan Solution
The COVID-19 pandemic has caused unprecedented challenges for many businesses across the country. Many have struggled to maintain their cash flow and retain their employees amid lockdowns, restrictions, and reduced demand. Fortunately, there is a federal program that can help eligible businesses keep their workers on payroll and survive the crisis: the Employee Retention Tax Credit (ERTC).
The ERTC is a refundable tax credit that allows businesses to claim up to $26,000 per employee for wages paid between March 13, 2020 and December 31, 2021. The ERTC can be claimed on a quarterly basis and offset against the employer’s share of payroll taxes. If the credit exceeds the tax liability, the excess amount is refunded to the employer by the IRS.
However, there is a catch: the ERTC is not paid immediately. Businesses have to wait until they file their quarterly or annual tax returns to receive their credit from the IRS. This can take several months, depending on the filing schedule and the processing time of the IRS. In the meantime, businesses may face cash flow issues and difficulty paying their bills.
This is where Swift SBF’s ERTC Loan solution comes in. Swift SBF is a leading online lender that specializes in providing fast and flexible financing solutions for small businesses. Swift SBF’s ERTC Loan solution allows businesses to access up to 90% of their expected ERTC amount in advance, within 24 hours of applying, and repay it when they receive their tax credit from the IRS. This way, businesses can get immediate access to funds that they are entitled to and use them to cover their operational expenses.
In this article, we will explain what the ERTC is, how to qualify for it, and how Swift SBF’s ERTC Loan solution works. We will also discuss the benefits and considerations of using Swift SBF’s ERTC Loan solution to access your ERTC funds faster.
Key Takeaways
The Employee Retention Tax Credit (ERTC) is a refundable tax credit that helps eligible businesses keep their employees on payroll during the COVID-19 pandemic.
Swift SBF’s ERTC Loan solution allows businesses to access up to 90% of their expected ERTC amount in advance, within days of applying, and repay it when they receive their tax credit from the IRS.
Swift SBF’s ERTC Loan solution has several benefits, such as covering operational expenses, potential tax deduction, and expert guidance.
Understanding the Employee Retention Tax Credit (ERTC)
What is ERTC?
The Employee Retention Tax Credit (ERTC) is a federal program that was created by the CARES Act in March 2020 and expanded by the Consolidated Appropriations Act in December 2020 and the American Rescue Plan Act in March 2021. The purpose of the ERTC is to encourage employers to keep their employees on payroll during the COVID-19 pandemic by providing them with a refundable tax credit.
The ERTC can be claimed by eligible employers for wages paid to eligible employees between March 13, 2020 and December 31, 2021. The amount of the credit varies depending on the calendar quarter and the number of employees. For wages paid in 2020, the credit is equal to 50% of qualified wages up to $10,000 per employee per year. For wages paid in 2021, the credit is equal to 70% of qualified wages up to $10,000 per employee per quarter. Therefore, the maximum credit per employee is $5,000 for 2020 and $7,000 for 2021.
The ERTC can be claimed on Form 941, Employer’s Quarterly Federal Tax Return, or Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees. The ERTC can be used to offset the employer’s share of Social Security taxes on all wages paid to all employees. If the credit exceeds the tax liability, the excess amount is refunded to the employer by the IRS.
Eligibility Criteria
Not all employers and employees are eligible for the ERTC. There are certain qualifications that must be met in order to claim the credit.
Qualifications for Businesses
To qualify for the ERTC, a business must meet one of two criteria:
The business experienced a full or partial suspension of operations due to a government order related to COVID-19; or
The business experienced a significant decline in gross receipts compared to a comparable quarter in 2019 or 2020.
A full or partial suspension of operations occurs when a government authority imposes restrictions that limit commerce, travel, or group meetings due to COVID-19. For example, a restaurant that had to close its dining room or reduce its capacity due to a state or local order would qualify for the ERTC. However, a business that voluntarily reduced its hours or operations due to COVID-19 would not qualify.
A significant decline in gross receipts occurs when a business’s gross receipts for a calendar quarter in 2020 or 2021 are less than 50% of its gross receipts for the same quarter in 2019. The decline ends when the business’s gross receipts for a quarter are greater than 80% of its gross receipts for the same quarter in 2019. For example, if a business had $100,000 in gross receipts in the third quarter of 2019, it would qualify for the ERTC if its gross receipts in the third quarter of 2020 or 2021 were less than $50,000. The qualification would end if its gross receipts in any subsequent quarter were greater than $80,000.
IRS Processing Delays
One of the challenges of claiming the ERTC is that it is not paid immediately. Businesses have to wait until they file their quarterly or annual tax returns to receive their credit from the IRS. This can take several months, depending on the filing schedule and the processing time of the IRS.
The IRS has been experiencing significant delays in processing tax returns and refunds due to the COVID-19 pandemic and the high volume of claims. According to the IRS website, as of April 9, 2021, there were still about 16 million individual and business tax returns that had not been processed from 2019 and 2020. The IRS also stated that it may take up to 16 weeks to process amended returns that claim the ERTC.
These delays can cause cash flow problems for businesses that need their ERTC funds urgently. Businesses may have difficulty paying their rent, utilities, payroll, suppliers, and other expenses while waiting for their credit from the IRS. This can jeopardize their survival and recovery from the COVID-19 crisis.
Swift SBF’s ERTC Loan Solution
To help businesses overcome this challenge, Swift SBF has developed a unique and innovative financing solution: the ERTC Loan. The ERTC Loan is a short-term loan that allows businesses to access up to 90% of their expected ERTC amount in advance, within 24 hours of applying, and repay it when they receive their tax credit from the IRS.
The ERTC Loan is designed to be fast, simple, and flexible. Businesses can apply online through Swift SBF’s website and get an instant decision on their eligibility and loan amount. The application process is streamlined and does not require extensive paperwork or documentation. Businesses only need to provide basic information about their business and their ERTC eligibility, along with some supporting documents such as tax returns, payroll reports, and bank statements.
Once approved, businesses can receive their funds within days. The loan amount is based on a percentage of the expected ERTC grant.
The repayment process is also simple and flexible. Businesses do not have to make any monthly payments or pay any interest on the loan until they receive their tax credit from the IRS. Once they receive their credit, they can use it to repay the loan in full or in part. If they repay the loan in full within 90 days of receiving their credit, they will not incur any interest or fees on the loan.
The ERTC Loan is a non-recourse loan, which means that Swift SBF does not require any collateral or personal guarantee from the borrower. The only security for the loan is the expected tax credit from the IRS. Therefore, if the borrower does not receive their tax credit or receives less than expected, Swift SBF will not pursue them.
Benefits and Considerations of ERTC Loan
The ERTC Loan advance is a unique and innovative financing solution that can help businesses access their ERTC funds faster and use them to cover their operational expenses. However, like any financing option, it has its pros and cons. Here are some of the benefits and considerations of using Swift SBF’s ERTC Loan solution to access your ERTC funds.
Pros of Swift SBF’s ERTC Loan
Quick Access to Approved Funds
One of the main advantages of Swift SBF’s ERTC Bridge Loan is that it allows businesses to access up to 90% of their expected ERTC amount in advance, within days of applying. This can be a lifesaver for businesses that need cash flow urgently and cannot afford to wait for months to receive their tax credit from the IRS. By getting their funds faster, businesses can pay their rent, utilities, payroll, suppliers, and other expenses on time and avoid late fees, penalties, or defaults.
Covering Operational Expenses
Another benefit of Swift SBF’s ERTC Loan is that it can be used to cover any operational expenses that the business needs to survive and recover from the COVID-19 crisis. Unlike other financing options, such as the Paycheck Protection Program (PPP) or the Economic Injury Disaster Loan (EIDL), which have specific rules and restrictions on how the funds can be used, the ERTC Loan does not have any limitations on the use of funds. Businesses can use the loan to pay for any expenses that are necessary for their operations, such as rent, utilities, payroll, inventory, marketing, equipment, taxes, or debt service.
Potential Tax Deduction
A third benefit of Swift SBF’s ERTC Loan is that it may offer a potential tax deduction for businesses that repay the loan in full within 90 days of receiving their tax credit from the IRS. According to Swift SBF’s website, if a business repays the loan in full within this timeframe, it will not incur any interest or fees on the loan. Therefore, the loan amount may be considered as a tax-free advance payment of the ERTC. This means that the business may be able to deduct the loan amount from its taxable income for the year, reducing its tax liability and increasing its net income.
