We’re Here for Your Business: Benefits of Hiring an Outside Business Consultant

Benefits of Hiring a Business Consultant
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In the constantly shifting business environment, business owners are expected to deal with a variety of new tasks and challenges every year. It may seem that there simply is not enough time in the day to run your business while also dealing with recurring financial decisions at the same time. Depending on the size of your business, hiring an employee to handle these tasks may not be the most cost-efficient option. 


One way for businesses to address these short-term issues is to retain the services of a business consultant. Business consultants review your business, assess the situation, and make recommendations in order to resolve these recurring problems. If your business is looking to grow and transition into heightened levels of efficiency, hiring an outside business consultant is an incredibly useful tool. 


Specialized and Credible: 

Most companies seek out business consulting when there are specific issues or avenues of a business that require a specialized professional’s guidance. These business advisors bring in a different skill set to assist in both short-term and long-term objectives. When new tasks are delegated to existing employees, they’re forced to go through new training sessions, re-organize their schedules, and will probably expect a larger salary. Similarly, hiring a new employee and preparing an onboarding schedule draws precious time, money, and resources away from core business initiatives. 


For short-term purposes, a business consultant comes right in and performs the essential duty that they were hired to do. Because they’re specialized in whichever service or function your business requires. These consultants use the most innovative and modern approaches to business obstacles that they’ve seen play out countless times. In the long term, a consultant can create an entirely new trajectory for your business and ensure that your finances are adjusted for continued success.


More Free Time, New Business Opportunities: 

The average business was inspired by the creation of a brilliant idea or the identification of an incredible business opportunity. Business owners most likely didn’t expect to be dealing with ever-growing financial challenges like payroll management or tax filing on top of that. Specialized business consultants can perform these functions so business owners can focus on what’s really important: running their business. 


Does your business have certain goals or new ideas that are always taking a backseat to more pressing tasks? Adding a business consultant is a temporary investment that frees up some availability for the business goals you typically would not have the time for. Business consultants utilize the most comprehensive technology and years of experience to employ business assessments that identify critical shortcomings and ultimately recommend the appropriate strategies. 


An Outsider’s Perspective

As a business owner, it can be difficult to identify existing issues within your own company. Whether purposeful or not, business owners hold an inherently biased opinion about their processes, their employees, and especially their shortcomings. As your business is clearly your prized possession, it can become commonplace to overlook continued issues or errors in the flow of business. An outside business consultant brings an objective perspective to help provide a new lens to business owners who are fully immersed in their daily routines and company traditions. 


Competent consultants, who have worked with hundreds of similar organizations, can identify the issues that are holding companies back and implement proven strategies to eradicate them. Oftentimes, the businesses that are family-owned and operated can benefit most significantly from consultants because the tension in family relationships requires third-party guidance. 


SD Associates is a full-service CPA and business advisory firm that has nearly 40 years of consulting experience in a wide range of industries. We are renowned not only for providing exceptional business counseling results for our clients but also for an unparalleled level of professionalism and communication. We don’t just give financial advice, instead, we are a dedicated partner here to provide guidance and clarity for any business obstacle that comes your way. Interested in learning more about the many benefits of outside business consulting or a business financial advisor ? Connect with us today! 

What a 3rd Stimulus Check May Look Like

What a 3rd Stimulus Check May Look Like
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Though there’s no guarantee yet, talks of a third stimulus check have been making their way around Washington DC for weeks. While the first round took months to reach some people, and the second round appeared too little to most, the path to a third check seems to be happening quickly. With another possible $1,400 on the horizon, there are still a lot of open questions, like “When are we getting a third stimulus check?” “How much will you get for your kids?” and “Who will qualify?”. The team at SD Associates is here to share some valuable information on what a third stimulus check may look like.


Who Could Qualify for the Third Stimulus Check?

While millions of people were eligible for the first and second checks, the third round could look a little bit different. Many taxpayers who were eligible for the first two could now find themselves excluded from the $1,400 based upon their earnings. Under President Biden’s $1.9 trillion coronavirus relief package (“Budget Reconciliation Act”), the new bill excludes individual taxpayers earning over $75,000 and joint filers making over $150,000. There will still be phase-outs for higher earning taxpayers.


It’s important to note that the third round’s eligibility requirements are different from the sliding scale that was used previously to determine past stimulus payments. The new Democratic proposal follows the same path as the second stimulus check, with the IRS reducing checks by 5% for the total amount made over the AGI limit. This means for every $100 made over the limit, the payment goes down by $5.


Larger Base Amount

The base amount of the third stimulus check is expected to be $1,400, $200 more than the first round of $1,200 that was delivered under the CARES Act and $800 more than the second round that just hit many bank accounts in January 2021. The $1,400 came about after many Americans complained about the second $600 check being too little, too late.


Another possible change? Families with dependent children aged 16 or under could see a little bit more. During the first round, families saw an extra $500 for each child, and that amount was raised to $600 for the second stimulus check. This time around, lawmakers are calling for a higher amount.


Quicker Timeline

“Are we getting a third stimulus check?” has been on everyone’s mind since the second check was delivered to many Americans. Should Congress pass a standalone bill centered on stimulus checks by the intended mid-March 2021 timeline, Americans could begin to see their payment in a matter of weeks. However, this date could be delayed due to several factors, including how long it takes the IRS to begin calculating your payments during the busy tax season.


Based on 2020 Tax Returns

The first stimulus payment was calculated based on either your 2018 or 2019 tax return. If you didn’t file during those two years, the IRS welcomed you to send in any necessary documentation through an online portal. The IRS also took information from the Social Security Administration, Railroad Retirement Board, or Department of Veterans Affairs if you received benefits. If no information was provided and you didn’t receive government benefits, the IRS is permitting the option to claim the “recovery rebate” credit on your 2020 tax returns. The second stimulus check was based on your 2019 return. If you didn’t file, didn’t use the non-filers portal to get your first payment, and didn’t receive benefits, then the IRS offers the option to claim the “recovery rebate” credit on your 2020 tax returns.


Because the IRS has already begun processing tax returns, those who file sooner could not only get their refund quicker, but they might also receive their third stimulus check faster as well.


Social Security

With the next round of stimulus funds, it might be possible that having a Social Security number will no longer be a requirement. During the first round of payment, without a Social Security number, people were unable to qualify for the $1,200. For families with children, both parents were required to have one to receive the extra $500 per dependent. After the COVID-Related Tax Relief Act was passed, the guidelines surrounding this loosened, allowing married couples to claim the additional money even if one of the parents didn’t have a Social Security number. This rule was also applicable for the first round of checks, allowing families to claim up to $1,200 with the additional $500 as a recovery rebate credit.


The third round of payments could see this requirement dissolve altogether. Under the HEROES Act, individuals, including non-U.S. citizens, would only need a Taxpayer Identification Number to receive the next payment.


In the grand scheme of things, the possibility of the third round of stimulus checks is moving at lightning speed. For the most up-to-date news, turn to the professionals at SD Associates. Not only can we provide valuable updates on the proposed third stimulus check, but we’re also here to assist you with our professional tax services all season long. Contact our team today for more information.

What the New Stimulus Bill Means for Your Small Business

Small Business Guide To New Stimulus Bill


On December 27, 2020, President Trump signed into law the second stimulus bill, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. This new bipartisan bill offers as much as $284 billion more for the Paycheck Protection Program (PPP), tax relief, and Economic Injury Disaster grants to small businesses that are struggling because of the ongoing COVID-19 pandemic. For some, this second round of money could be the difference between staying afloat and closing their doors for good. You may be wondering how this new bill affects your small business and if you can take advantage of it, we’re sharing the highlights and some guidance for your situation.


Your Small Business May Be Eligible for a Second PPP Loan

The new funds for PPP loans are available through March 31, 2021. Owners who did not receive a loan in the first draw can apply. Those who did receive a loan and have either used or plan to use it may also be eligible to apply, but with limitations. Borrowers can receive one first draw and one second draw PPP loan as part of the new stimulus package. Second draw loans will be calculated similarly to the first draw at 2.5 times the average monthly payroll of the prior year or, for the Accommodation and Food Services sector (NAIS Sector 72), 3.5 times the average payroll. No loan amount may exceed $2 million. Second draw applicants also:


  • Must be a small business with 300 employees or fewer
  • Have had at least a 25% reduction in gross revenue in one or more quarters of 2020 when compared to the same quarters of 2019


If your business continued to struggle throughout 2020 and into the new year, you might be eligible and can apply for this loan.


You May Be Paying Fewer Taxes

Probably the most welcoming change, small business owners who received PPP loans – whether through the first round or the new round, the act clarified certain tax positions whereby, if you used your PPP to pay business expenses that are normally deductible, you can take those deductions just like you would during a normal, COVID-free year. This means as a small business owner, you will likely have fewer taxes to pay in 2020. Neither the forgiveness in the PPP loans nor Economic Injury Disaster grants will be taxed in the 2020 season.


More Expenses Included

The first PPP loan allowed small business owners to use the funds to cover many critical expenses including payroll costs, mortgage interest, rent, and utilities. With the new legislation, more expenses are included in loan forgiveness including operations, property damage cost, supplier costs, and worker-protection expenditures (PPE).




Nonprofits are Now Eligible

Many nonprofits who didn’t qualify for the first round of PPP are now eligible for the second round of relief. The new requirement for 501(c)(6) nonprofit organizations includes:


  • Must have 300 employees or fewer
  • No more than 15% of their gross revenue most come from lobbying
  • The organization must plan to or have used its full PPP amount


If you need help applying for forgiveness or the application in the second round or just have more questions on the new relief bill that was passed, reach out to our team today. We provide affordable tax services throughout the Tri-State area, offering the highest quality of personalized service to our clients.

How Small Businesses Should Prepare for a Second COVID-19 Lockdown

How Small Businesses Should Prepare For A 2nd Covid-19 Lockdown



As COVID-19 continues to surge across the country, one thing is certain—the pandemic is far from over. The second wave of coronavirus is here, coinciding with cold and flu season, making everyone extra cautious. Experts believe that this second wave could last longer than the first, with restrictions going beyond face coverings and washing your hands. If you’re running a business during the COVID-19 pandemic and are wondering how to keep your small business successful during this unprecedented time, SD Associates is here to help. Here are some guidelines below to assist your small business for a second COVID-19 lockdown.


Build & Save Cash Reserves

One way to keep your small business successful during this time is to not be caught off guard. This includes building and saving assets in case of an interrupted cash flow. Your savings are there to support your business in the event of an emergency. During the first shutdown, if you found you only had enough cash to cover expenses for a couple of weeks, it’s time to formulate a plan and work on aggressively building up a reserve. Experts suggest asking landlords, suppliers, and your bank for deferrals. With our advisory services, we can help you layout your perfect strategy, catered specifically to your business.


Tighten Budgets & Spending

While you might already be operating on a tighter budget, now is the right time to consider trimming any excessive “fat”. Try to prioritize your spending based on needs, rather than wants. Negotiating with vendors to defer or stretch payables, spending less on advertising or marketing efforts, and running down inventory to minimum quantities should all be considered when trying to slim down your budget.


Strengthen E-Commerce Business

Running a business during the COVID-19 pandemic has forced many businesses to pivot, and this could be mean switching to an e-commerce business model during these unstable times. Nowadays, most people have access to the internet through their phone, computer, or tablet and if your business isn’t online yet, you should make that a top priority. Setting up an e-commerce store is going to be your biggest asset and can help keep sales afloat. If you sell products, services, or food, try moving them online. Take pictures and videos to advertise your specialties to keep business rolling in. If there’s one thing we’re sure of, it’s that the internet isn’t going anywhere anytime soon.


Invest in Remote Technology

Remote work became a staple for most businesses at the onset of the pandemic. While most people have a phone and internet connection at home, many companies weren’t set up to allow employees to work out of their homes. The use of video calls, secure Wi-Fi networks, and collaborative tools, like Microsoft Teams, Zoom, and Google Workspace, all allow people to work together virtually, and they come in handy during this shift to a remote-first approach. If the first lockdown brought challenges to your remote work, take this time to assess what went wrong and what you need to do to improve these items.


If the first shutdown taught us one thing, it’s to always be prepared for the unexpected. While many businesses around the country brace for a second lockdown, it’s now time to set up and execute a disaster plan. Having a plan in place could be the difference between surviving during the second shutdown and your business closing its doors. If you need help with financial services or planning for your small business, contact the experts at SD Associates in Elkins Park, PA today.

IRS Extends Stimulus Check Deadline to November

If you haven’t received a stimulus check yet, you still have time. The IRS has recently extended the deadline to register for your stimulus check to November 21, 2020, five weeks past the previous October 15, 2020 deadline. This can impact over 9 million people across the country, helping to soften the blow of the coronavirus pandemic. The professionals at SD Associates are sharing everything you need to know about the extension and the non-filers stimulus check.

Who Qualifies?

The non-filer stimulus check is typically reserved for those who have not received a stimulus check yet, including low-income families who live in underserved areas or individuals who made little or no money and didn’t have to file. U.S. citizens and U.S. resident aliens are eligible for checks of up to $2,400 if filing joint tax returns and can get up to an extra $500 with qualifying children aged 16 or younger at the end of 2019. To receive the full payment, there are also income limits including:

  • $150,000 for married couples filing joint returns
  • $112,500 for the head of household filers
  • $75,000 for all other eligible individuals

This extended deadline could help millions of people pay rent, cover bills, feed their families, and pay for other essentials.

How to File

To meet the deadline for the stimulus check, individuals should register as quickly as possible using the Non-Filers tool on IRS.gov. It’s important to understand that this tool will not be available after the November 21 deadline because the IRS needs to prepare for the upcoming 2020 tax filing season. IRS Commissioner Chuck Rettig states, “Any further extension beyond November would adversely impact our work on the 2020 and 2021 filing seasons. The non-filers portal has been available since the spring and has been used successfully by many millions of Americans.” According to the IRS, they sent nearly 9 million letters in September reminding people who meet the requirements for the $1,200 Economic Impact Payment but who don’t normally file a tax return to register for their stimulus check.

Individuals should know there is no cost to register. If you do not have access to the internet, the IRS encourages you to file a tax return for 2019 with the IRS or electronically through your tax preparer, tax software provider, or the IRS Free File. To speed up the process, choose to receive your check by direct deposit versus a paper check by mail. You may review the status of your check by using the IRS Get My Payment tool. If you miss the deadline for the stimulus check, you will have to file a 2020 income tax return to claim your credit.

SD Associates is here for you. As the pandemic carries on, our CPAs are here to offer expert tax services at affordable prices to ensure you and your business gain peace of mind and control over your taxes. Whether you’re looking to find eligible tax credits, develop a smart payment plan or you just want to create an effective business strategy, know our team is here to help. Connect with our accountants today and let us help you with all your tax service needs.

October Is Financial Planning Month: Here Are 6 Steps for a Flaw-Free Financial Plan

financial plan puzzle


We all want to have financial security, so it’s important to establish a flaw-free financial plan for yourself in order to achieve this. A financial plan is a comprehensive snapshot of your current finances, your long-term financial goals, and the strategies you put in place for yourself to achieve these goals. A good financial plan strategy will allow you to save money, prepare for the future, and achieve long-term goals, like saving for retirement or your child’s college education. Everyone’s financial plan will look different. We are sharing six common steps how to create a financial plan. 

What Is Financial Planning?

Financial planning is an ongoing process that determines how you will achieve your financial goals and objectives. It can help reduce stress and support your current needs while helping you build a nest egg future needs. A financial plan is important because it helps you create a roadmap for your future so you can make the most of your current assets and help ensure your financial future is comfortable. While you can create a financial plan yourself, it’s best to utilize the talents of a certified financial planner.


Set Financial Goals

The first step in creating your financial plan is setting specific goals that will help you stay on track. These goals will be your foundation for financial success. Your goals can include short- or long-term objectives, like paying off student loans or buying a new car. Avoid having grand, lofty goals like, “I want to be rich” and instead focus on smaller objectives like, “I want a college fund for my kids” so you don’t feel overwhelmed trying to accomplish them. Once well-defined and prioritized, your goals will be the driving force behind your financial plan.


Track Your Financial Activity

One of the more important aspects of financial planning is creating a budget and tracking where your money goes. Having a sense of your monthly cash flow (expenses/savings/income) can help give you an accurate picture of where your money comes and goes each month and help you establish short, medium, and long-term plans. Once you begin to see where your money goes, you can adjust it to better achieve your goals. For an immediate plan of action, try developing a simple budget. You can create one by:


  • Tracking your income and expenses.
  • Using a budgeting app.
  • Utilizing the 50/30/20 budget method. This includes putting 50% of your take-home income toward essentials like housing, utilities, food, and other recurring payments. 30% then goes toward wants like dining out and entertainment. The last 20% goes toward savings and debt payment.


Minimizing credit card debt is an example of a medium-term plan and retirement planning is a typical long-term plan.


Start Saving

After your major goals are set and you’ve been keeping track of income and expenses, it’s time to start saving! Refer to your budget and re-examine your spending accordingly. You can start immediately saving more by cutting your expenses and increasing your income. First, begin by determining where you’ve been spending too much, such as entertainment or dining out. Then, look for ways to save. Next, find out ways to increase your income. This can be accomplished through a second job, asking for a raise, or even a career change. Once your extra income is flowing, ensure you’re putting it into a savings account.


Emergency Expenses

It’s a smart idea to be prepared in the event of an emergency. One of your goals should include putting away extra cash for emergency expenses. Start small—$500 to cover a home repair—and make sure to increase this amount over time to be able to cover a month’s basic living expenses, and so on.


Tackle Debt

Unfortunately, you can’t begin your road to financial success if you’re carrying a large amount of high-interest debt. Between large debt with minimum monthly payments with high-interest rates this could take too many years to pay down as well as damaging to your credit score. It’s important to start paying down this type of debt as soon as feasibly possible. Try creating a debt pay-off strategy and be consistent. Slowly reduce credit card balances and other loans and you’ll feel much better about your financial future.


Review Your Plan Constantly

Plans change, especially when they involve your finances. It’s important to periodically review your financial situation. Quarterly, ask yourself:


  • Have my goals changed?
  • Has my income (or debt) gone up or down?
  • What are the current needs of my health or my family? Have they changed?


If anything has changed, it’s simple to alter your goals to handle these unexpected hurdles. Checking in quarterly can help you stay on track and keep plans from derailing.


We all want to be financially independent and build wealth, and at SD Associates, our goal is to help you achieve this. Deciding to embark on a journey toward financial independence can be scary and you might not know how to create a financial plan that aligns with your future, but with our guidance, we can help create a fresh beginning with your finances and change your life for the better. Contact us today to get started.


Paycheck Protection Program: Current FAQ For Small Business Owners About Loan Forgiveness


up close picture of payment protection program

The financial environment and the current state of the economy are ever-changing. For small business owners navigating these difficult waters, we understand the hardships you may have come across this year. With new rules, requirements, protocols, and processes that change almost every day, we know there may be some lingering questions regarding the Paycheck Protection Program which was enacted by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the related loan forgiveness process.


As of August 11th, 2020, the Small Business Administration alongside the U.S. Treasury issued new guidance through Frequently Asked Questions (FAQs) aimed at helping business owners who participated in the Paycheck Protection Program. These FAQs discuss simplified PPP loan forgiveness guidelines and help borrowers navigate maximum loan forgiveness.


General Loan Forgiveness

Small business owners have been dealt a lot this year, from storefront closings, layoffs, and the paycheck protection program. With the need for clarity on PPP loan forgiveness guidelines, we’re reporting the key highlights of the ten pages of Treasury FAQs below.


  • Self-employed individuals, sole proprietors, and independent contractors with no employees at the time of the PPP loan application and who did not include any employee’s salaries in the total of average monthly payroll in the application form automatically qualify to use Form 3508EZ or lender equivalent.
  • The FAQ addresses a common question regarding making payments while awaiting forgiveness. The answer is no. If the borrower submits an application within 10 months of the end of the Covered Period, the borrower is not required to make any payments until the loan amount is sent to the lender by the SBA. If the loan is fully forgiven, the borrower will not be responsible for any payments. If only part of the loan is forgiven, the remaining balance must be paid in full by the borrower on or before the maturity date of the loan.
  • The Covered Period refers to the 24-week period beginning on the date the PPP loan payment date or if the borrower received the loan before June 5, 2020, the borrower could choose an alternate 8-week period.

Loan Forgiveness Payroll Costs

There are various questions surrounding payroll costs and we’re sharing some of the most important elements of Loan Forgiveness Payroll Costs FAQ:


  • Payroll costs that were incurred during the Covered Period or the Alternative Payroll Covered Period but paid after the Covered Period or the Alternative Payroll Covered Period are eligible for loan forgiveness if the payroll costs are paid on or before the next regular payroll date after the Covered Period or Alternative Payroll Covered Period.
  • Borrowers must calculate payroll costs for partial pay periods.
  • When computing compensation, borrowers need to use the gross amount before deductions and not the net amount paid to the employees.
  • Payroll costs include all forms of compensation paid to the employees, including commissions, hazard pay, and tips.
  • Expenses for employee group health care benefits that are paid by the employer can be considered payroll costs that are eligible for loan forgiveness. Expenses paid by the employee are not included in payroll costs.
  • Employer contributions for retirement benefits that are paid or incurred by the borrower during the Covered Period or Alternative Payroll Covered Period qualify as payroll costs and are eligible for loan forgiveness.


Calculating Non-Payroll Costs

Non-payroll costs include rent, utilities, and interest on loans incurred before the Covered Period, yet paid during, are eligible as part of the loan forgiveness. Other key points to consider include:


  • Non-payroll costs incurred during the Covered Period and paid on or before the next regular billing date, even if this date is after the Covered Period are eligible for forgiveness.
  • Payments made on recently renewed leases on payments on refinanced mortgage loans are eligible for loan forgiveness if the original lease or mortgage existed before February 15th, 2020, and the payments are made following the renewed lease during the Covered Period.
  • Another utility payment eligible for forgiveness includes a “payment for a service for the distribution of . . . transportation” under the CARES Act. This refers to transportation utility fees assessed by state and local governments.


Reduction in Work or Wages

Layoffs and the inability to rehire or hire new employees has brought about many complicated issues within the PPP program. Recent regulations have changed and the FAQ states:


  • A borrower may exclude any reduction in FTE (full-time equivalent) employees if the borrower can document the inability to rehire individuals employed on February 15th, 2020, and similarly qualified individuals for unfilled positions on or before December 31st, 2020. Borrowers are required to inform the unemployment insurance office of any rejected rehires within 30 days of the rejection.
  • Seasonal employers who use a 12-week period between May 1st, 2019, and September 15th, 2019 to calculate their maximum PPP loan amount must use the same 12-week period as the reference period for the calculation of any reduction in the amount of forgiveness.
  • Certain pay reductions that arose for employees during the Covered Period or the Alternative Payroll Covered Period may reduce the amount of loan forgiveness.


If you need assistance with the paycheck protection program or have further questions about the small business loan forgiveness, do not hesitate to contact our team of CPAs. The professionals at SD Associates are here to offer you and your small business the best financial services possible to help you successfully navigate these difficult and uncertain times. Call us today at (215) 517-5600 or contact us here.

Round Two of Payment Protection Program: Here’s What You Need to Know

How To Apply For Small Business Loan Corona Virus
Sticky Note With Handwritten “Apply”

Small businesses across the United States have all been impacted in some way by coronavirus (COVID-19) pandemic. Forced closures, reduced hours and layoffs have affected employees and employers everywhere. In an attempt to provide some relief and help for small businesses. The CARES Act was enacted to provide much needed help to individuals, business and others in response the economic distress. One of the programs, is called the Paycheck Protection Program. The loan program will allow businesses suffering due to the coronavirus outbreak to borrow money for a variety of qualified costs related to employee compensation and benefits. The CARES Act calls for a portion of the above-mentioned paycheck protection loans to be forgiven on a tax-free basis.

The initial round, in late March 2020 of funding, provided nearly $350 billion guaranteed paycheck protection loans for small businesses. However, these funds ran out extremely quickly. With a passage of the paycheck protection program and health care enhancement act which was recently signed provides additional relief by providing an additional $310 billion more in funding. Here’s additional information you need to know about the second funding of the coronavirus relief loans for small businesses.

Assistance for Smaller Businesses
Of the $310 billion, $60 billion will be specifically set aside for smaller banks and credit unions. The law also expands the Economic Injury Disaster Loan (EIDL) program by $60 billion: $10 billion for grants and $50 billion for loans. This is welcome news for businesses that desperately need funding to weather the economic uncertainty created by the COVID-19 pandemic. The legislation greatly expands the number of businesses, including individuals who operate as a sole proprietor, or independent contractor (including non-profits). Each business can qualify for a loan to pay employees and other payroll costs and cover other non-payroll expenses like mortgage interest, rent and lease payments as well as utilities. All loans granted will have a 1% fixed interest rate and will be 100% forgiven if the money is used appropriately and within the guidelines set by the SBA.

How Much Money Can I Receive?
The maximum amount you can receive is your businesses’ monthly average payroll cost in 2019, multiplied by 2.5 with a maximum of up to $10 million. If you are a newer business, existing after June 30th, 2019, the SBA lender will look at costs from January and February 2020. Seasonal employers’ costs will be calculated differently, using a 12-week period beginning in either February or March 2019 and ending June 30th, 2019.

In an effort to provide the necessary help for small businesses, the goal of these government issued loans is to keep people employed during the span of the pandemic. The loans will be seen as grants from the government as long as the requirements mentioned above are met. The forgivenesses will be reduced, and businesses will be expected to repay the loan if employee counts and employee salaries are reduced by more than 25% under the Protection Payment Program. If you rehire or restore decreased salaries before June 30th, 2020 you will not be penalized or expected to pay back the loan. Adequate record keeping to prove your expenses will be required and your business will need to have spent at a minimum 75% of your loan on payroll to qualify for forgiveness.

We understand that our environment is constantly changing due to COVID-19 and at SD Associates in Elkins Park, PA, we want you to know that we are here for you. From questions about the Payment Protection Program for your small business to financial guidance and payroll assistance, our accountants are here to help you navigate these constantly changing waters. Contact us today for all your needs.

Practices That Can Help Your Small Business Raise Capital

As a small business owner, you need to increase profits and maintain a healthy equity. But if you’re currently acting as your own accountant, you may be missing out on crucial ways to do this. The accountants at SD Associates are here to explain why an accountant will benefit your small business in more ways than one.

Manage Your Business’s Cash Flow

Cash flow is the lifeline for any business, but more often than not, small business owners don’t have the resources or time to effectively track cashflows properly. If you’re looking to apply for a business loan, the strength of your cash flow is one of the factors that lenders look, so you have the ability to repay a loan. Whether you need a loan to help cover your business’s working capital needs or a loan restructuring to help expand your business, our accountants will be able to assist you in tracking your cash flow and ability to provide the bank solid information when applying for that new loan.

Help Improve Your Business Credit

When you need apply for a business credit card or for a loan, having good (or great) credit is crucial for being able to access capital. But just because you’re excellent at running your small business doesn’t mean you know how to build your business credit—that’s where SD Associates comes in! Our accountants will guide you through best practices to build credit for your business, so you can get the funding you want when you need it. These practices may include:

  • Establishing a business entity separate from your personal finances.
  • Financing certain business purchases.
  • Registering with the credit bureau that is appropriate for your small business.

Assists with Borrowing Money Against Unpaid Invoices

As a small business owner, there may be times where you need cash fast or you are waiting for your clients to pay their outstanding invoices. SD Associates accountants have the financial and business acumen needed to identify these gaps for cash flow purposes. They can assist you to determine why your cash flow is negative.  If you have several clients who are not paying their invoices within the terms set forth in your policies, we can will assist you through the process of factoring these invoices. This practice enables you to borrow money against unpaid invoices so that you can quickly get the capital infusion you need to help you run your business efficiently.

Whether you are looking for an accountant to help you in the process of raising capital, or you need a bookkeeper to manage your monthly expenses and invoices, SD Associates in Elkins Park, PA can help! Contact us today to schedule an appointment with one of our financial experts.

Could captive insurance reduce health care costs and save your business taxes?

If your business offers health insurance benefits to employees, there’s a good chance you’ve seen a climb in premium costs in recent years — perhaps a dramatic one. To meet the challenge of rising costs, some employers are opting for a creative alternative to traditional health insurance known as “captive insurance.” A captive insurance company generally is wholly owned and controlled by the employer. So it’s essentially like forming your own insurance company. And it provides tax advantages, too.

Benefits abound

Potential benefits of forming a captive insurance company include:

  • Stabilized or lower premiums,
  • More control over claims,
  • Lower administrative costs, and
  • Access to certain types of coverage that are unavailable or too expensive on the commercial health insurance market.

You can customize your coverage package and charge premiums that more accurately reflect your business’s true loss exposure.

Another big benefit is that you can participate in the captive’s underwriting profits and investment income. When you pay commercial health insurance premiums, a big chunk of your payment goes toward the insurer’s underwriting profit. But when you form a captive, you retain this profit through the captive.

Also, your business can enjoy investment and cash flow benefits by investing premiums yourself instead of paying them to a commercial insurer.

Tax impact

A captive insurance company may also save you tax dollars. For example, premiums paid to a captive are tax-deductible and the captive can deduct most of its loss reserves. To qualify for federal income tax purposes, a captive must meet several criteria. These include properly priced premiums based on actuarial and underwriting considerations and a sufficient level of risk distribution as determined by the IRS.

Recent U.S. Tax Court rulings have determined that risk distribution exists if there’s a large enough pool of unrelated risks — or, in other words, if risk is spread over a sufficient number of employees. This is true regardless of how many entities are involved.

Additional tax benefits may be available if your captive qualifies as a “microcaptive” (a captive with $2.2 million or less in premiums that meets certain additional tests): You may elect to exclude premiums from income and pay taxes only on net investment income. Be aware, however, that you’ll lose certain deductions with this election.

Also keep in mind that there are some potential drawbacks to forming a captive insurance company. Contact us to learn more about the tax treatment and other pros and cons of captive insurance. We can help you determine whether this alternative may be right for your business.