Bridge Funding for ERTC payments

 

Bridge funding is available for companies awaiting ERTC from the Govt.  

Some employers may not have the funds available to take advantage of the credit when they file their taxes, and therefore may need a "bridge" to help them access the funds in the meantime.

One way to access the funds sooner is to apply for an advance of the credit. The IRS allows eligible employers to apply for an advance of the credit by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. Once the form is submitted, the IRS will determine the amount of the advance and issue a payment to the employer. This will help bridge the gap between when the employer incurs the qualified wages and when the credit can be claimed on their taxes.

 

Additionally, some lenders and FinTech companies have started offering loans or lines of credit that are secured by the ERTC, which could provide bridge funding to employers.

It's important to consult with your accountant, tax professional or the IRS for more information on the advance payment and other options for bridge funding.

Loans against the Employee Retention Tax Credit (ERTC) are a type of financing option that allows eligible employers to borrow money based on the expected ERTC they will receive from the IRS. These loans are intended to provide employers with immediate access to funds to help them retain their employees, even if they have not yet filed their taxes and claimed the credit.

The way it works is that the lender will advance the employer funds based on an estimate of the ERTC that the employer will receive. The employer will then use the funds to cover their payroll and other expenses related to retaining employees. Once the employer files their taxes and claims the credit, they will use the credit to repay the loan.

It's important to note that not all lenders are offering loans against ERTC and the terms and conditions may vary. It's important to be aware of the terms of the loan and the fees involved, as well as the creditworthiness of the lender. It is also important to consult with your accountant, tax professional or the IRS for more information on the ERTC and the eligibility of your business to claim the credit before entering into any agreements.

There are several ways for eligible employers to get funding from the Employee Retention Tax Credit (ERTC) quickly:

1. Advance Payment: Employers can apply for an advance payment of the ERTC by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19 to the IRS. The IRS will then determine the amount of the advance and issue a payment to the employer.

2. ERTC-backed loans: Some lenders and FinTech companies have started offering loans or lines of credit that are secured by the ERTC. These loans allow employers to borrow money based on the expected ERTC they will receive and use the funds to cover their payroll and other expenses related to retaining employees.

3. PPP loan: Employers can also apply for a Paycheck Protection Program (PPP) loan, which can be used to cover payroll costs and other expenses, such as rent and utilities. PPP loans can be forgiven if certain conditions are met.

It's important to note that not all lenders are offering ERTC-backed loans and the terms and conditions may vary. It's important to be aware of the terms of the loan and the fees involved, as well as the creditworthiness of the lender. It is also important to consult with your accountant, tax professional or the IRS for more information on the ERTC and the eligibility of your business to claim the credit before entering into any agreements.

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