Biden’s administration is moving swiftly with measures to boost the US economy and bring COVID-19 under control.

While we’re waiting for the House of Representatives to debate and approve the America Rescue Plan (expected to be signed by President Biden this week and allocating a further US$50 billion for SMEs), we thought we’d give an overview of what support is currently available for SMEs in the U.S. affected by COVID-19.

As usual the politics are diverse, but it’s encouraging that

While the plan has still not been approved by the US Senate, the main highlights for small and medium companies (SME’s) are:

  • The Paycheck Protection Plan (PPP), which provides funds toward job retention and certain other expenses. PPP provides small businesses with funds to pay up to 8 weeks of payroll and benefits costs for their employees, and funds can also be used for rent, utilities or interest on mortgages.
  • You can also apply for an Economic Injury Disaster Loan (EIDL) from the Small Business Administration—which provides an advance of up to $10,000, if your business is currently experiencing COVID-related loss of revenue. Most importantly, this does not have to be repaid, though the amount will be deducted from any PPP forgiveness amount. It’s also designed for businesses with fewer than 500 employees (including sole proprietors, independent contractors, the self-employed and 501(c)(19) veterans organizations), though businesses meeting the SBA’s size standards may also be considered in certain industries, even if they have +500 staff.
  • The Employee Retention Credit (ERC), has been extended to June 30, 2021. Eligible employers can claim a refundable tax credit against the employer share of Social Security tax, equal to 70% of the wages they pay to employees from December 31, 2020, to June 30, 2021. ERC is limited to $7,000 per employee per calendar quarter, for a total of $14,000 per employee for 2021.
  • There are also specific grants to help food service businesses and shuttered venues. Many State and Local Governments also have grant options available.

In addition, SMEs should be prepared to jump at announcements for the funds earmarked in America Rescue Plan. Conditions for eligibility are still under discussion, but we are told the allocation is there.

You should also remember that the tax laws around all the grants are different and will need careful tracking. Particularly if your business already crosses borders… For example, will funding received in the U.S. affect your tax position in Brazil?

Local Knowledge – International Coverage

Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.

Do you need more information?

Raimundo Díaz
Global Head of International Corporates

All information contained in this publication is up to date on 2021. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.