Starting a Business
It’s difficult to get started on the right path.
Which is exactly why we created ExitPromise.
Over the past 10 years, our Featured Advisors have helped more than one million business owners, like you.
And we don’t plan on slowing down anytime soon.
Our Latest Startup Blog Posts:
The SBA EIDL Round 2 extended application deadline to 12/31/2021 and introduced the New Targeted EIDL Advance Grants for businesses continuing to suffer from the Covid-19 pandemic. Learn more about the changes to the EIDL program, which businesses can qualify for the EIDL grant and how to apply.
Our Comprehensive Starting a Business Checklist includes the steps for Pre-Startup, Business Formation and How to Establish your Startup. It’s your roadmap to launch a new business while protecting your personal assets and income.
Due to the wide media coverage over the availability of PPP Loans, the subsequent funding drought, and the numerous complexities involved in obtaining these loans, many business owners overlooked a different way to recover employee payroll costs if their business had been mandated to shut down by a governing authority or if their revenue had plummeted due to the Covid-19 pandemic.
The Employee Retention Credit, under the CARES Act Section 2301, offers a viable and alternative way to recover payroll costs for any type of employer, except state and local government entities, regardless of their size.
On Monday, May 3rd, 2021, the Small Business Administration (SBA) opened its application portal for the Restaurant Revitalization Funding (RRF) to certain restaurants, bars and other similar businesses that serve food and/or drink which have suffered a reduction in revenue in 2020 when compared to 2019 as a result of the pandemic.
Similar to the Paycheck Protection Program Loan (PPPL) program, this federally-funded program is intended to provide cash to businesses which have suffered revenue losses and if spent on the proper types of expenses within a specific period of time (the Covered Period), the loan may be fully-forgiven by the SBA.
Up until now, the PPP Loan proceeds for Schedule C filers was based on the 2019 net profit (referred to as the net earnings from self employment) plus payroll costs if employees worked in the business. The Interim Final Rule (IFR) effective on March 3, 2021 allows a business owner to use either their gross income or net income as the basis to compute its PPP Loan request amount.
The Small Business Administration (SBA) issued a Procedural Notice on October 2, 2020 which offers business owners and lenders guidance on how Paycheck Protection Program (PPP) Loans are to be handled when a business has a change in ownership.
This post summarizes the notice and includes an Infographic to assist business owners. It includes the following topic:
When does a Business Sale Require the SBA’s Approval
Does a Business Sale Require the PPP Lender’s Approval or Notification
Required Steps Pre and Post-Closing for PPP Borrowers
SBA Timeframe to Approve a Sale or Merger when a PPP Loan Transfers
Does the EIDL Grant Impose Additional Steps When Selling a Business
On June 15, 2020, the Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) applications to businesses with no more than 500 employees and non-profit organizations operating and suffering substantial economic injury as a result of the pandemic in all of the U.S. states, Washington D.C., and territories.
Independent Contractors, sole-proprietors (with or without employees), gig workers and freelancers are also eligible to apply for the EIDL.
On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA), which is the latest attempt to save struggling businesses from permanent shutdown.
The Flexibility Act offers business owners seven significant changes to the original Paycheck Protection Program (PPP) Loan terms. The House and Senate were driven to make these changes due to the lengthy pandemic and the fact that many PPP Loan recipients have not been able to re-open their doors for business during the required eight-week ‘covered period’ set forth in the original PPP Loan Act.
The PPP Loan Flexibility Act will make it much easier for business owners to achieve full, or nearly full, loan forgiveness.
The new law provides business owners with seven significant changes to the original law and those include:
The Small Business Administration announced on Thursday, April 16th all federal funds set aside for the Paycheck Protection Plan (PPP) Loans have been allocated to those business owners who were persistent (and fortunate) enough to get through the application process and receive an official registration number from the SBA via its bank.
In simple terms, the PPP Loans are out of money to assist business owners.
On Friday, March 27, 2020, the Paycheck Protection (Loan) Program (PPL) for small businesses was approved as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This new law is intended to help small business owners in an unprecedented way.
First, while the Paycheck Protection Program Loan will be initially set up by banks and approved by the SBA under section 7 (a), unlike other SBA loan programs, the PPL is guaranteed 100% by the SBA.
Second, if the proceeds of the loan are used by business owners as Congress, the Senate and President Trump intended, the loan will be forgiven.
In this post, I will be addressing how to pay yourself as a business owner and these related subjects:
Business owner compensation overview
Why does Reasonable Compensation of business owners matter
S-Corp Shareholder Employee compensation
C Corporation Shareholder Employee compensation
Distribution of Property & Cash to Other Shareholders
Taxes Applicable When a Business is Sold to a New S Corp or C Corp owner
Partnerships – Compensation, Distributions & Sale Proceeds Tax Consequences
Sole Proprietorships Compensation,Distributions & Sale Tax Consequences
LLC Member Compensation, Distributions & Sale Tax Consequences
For many businesses, the ultimate goal is to sell the business. Can you picture it? Walk away from the daily stress and aggravation with a fat pile of cash. Hop a plane to your favorite tropical destination and spend the rest of your days lounging a white sandy beach, sipping pina coladas out of a coconut, without a care in the world.
Well, friends, the above scenario is the ideal scenario. I like sipping cold drinks on a beach as much as the next guy, and I hope that happens for you. But if you clicked on this article, you may be looking at a much different scenario.
And that’s what this article is going to cover: the less-than-ideal scenario.