New COVID-19 Relief Bill and Cryotherapy
Do Not Close Your Cryo Business!
How much of a loan can your cryotherapy business receive?
The new round of coronavirus relief stimulus provides extensive relief for cryotherapy businesses. President Trump signed off on a $908 billion COVID relief bill on December 27th, 2020. This bill, the Consolidated Appropriations Act of 2021, provides an additional $300 dollars in unemployment relief per week and a whopping $300 billion to help small business. Even if you applied for a PPP loan last year you can still apply again. Here is a guide to help you understand how your business can benefit from this stimulus package.
Do You Qualify? Yes!
Cryotherapy businesses qualify if they have 300 or fewer employees, have used all of their PPP loan (if applicable), and can show that you have a 25% gross revenue decline in 2020 compared to 2019.¹ This should qualify for nearly all cryotherapy businesses. If you did receive a previous PPP loan and have not used those funds you must use them before you apply again. The new package specifically allows for a “second-draw” on a second PPP loan, so don’t miss out. If you qualified for the first loan, you will more than likely automatically qualify for the second one.
What Loan Do You Need?
Paycheck Protection Plan: Most cryotherapy businesses will need a PPP loan. This must be used to pay for payroll, rent, utilities, and other employment-related expenses. If you use 60% of your loan for payroll expenses within 8 weeks the loan will be forgiven. The maximum loan is now only two million, reduced from the previous amount of ten million. If your PPP loan is for less than $150k forgiveness will be easier to obtain, but you only have until March 31st, 2021 or until the funds are exhausted, so do not wait.
Economic Injury Distaster Loan: If you are losing revenue you can apply for an EIDL loan to “meet financial obligations and operating expenses that could have been met had the disaster not occurred.”¹
Economic Injury Distaster Grant: Like before you may be eligible to receive an EIDL grant up to $10,000 that does not have to be paid back, but you must qualify. Most cryotherapy businesses that applied for this last year immediately qualified, so do not hesitate. The funding for this grant will not last long. Click here for the SBA website.
Section 7(a) and 504 Loans: Not directly related to the most recent stimulus the SBA Microloan program can be used in addition to any federal stimulus. You can borrow up to $5 million at both fixed and variable interest rates. Click here for the program.
How Will This Affect Your Taxes?
According to the US Chamber Of Commerce the new stimulus “makes PPP loans non-taxable and ensures that the majority of business expenses paid for with PPP loans are also not taxable.”² This is an expansion that was not available last year. As always, make sure to communicate with your tax professional or CPA to make sure you are doing everything lawfully and within government guidelines.
Founded on facts: for peer-reviewed articles, scholarly journals, and articles cited above please see the below sources.
https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loans
https://www.uschamber.com/co/start/strategy/federal-small-business-stimulus-aid-programs-guide
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