No matter what industry you work in, all of them come with their own buzzwords and acronyms that do not make much sense to anyone on the outside. And if you are running your own business, you end up wearing a lot of hats. Sometimes, you are required to deal with clients from different industries and it is absolutely crucial that you familiarize yourselves with their jargon. Here is a checklist of accounting terms that every small business owner must know:
The Paycheck Protection Program (PPP) is an unprecedented Small Business Administration lending program designed to prevent or mitigate the effects of massive numbers of layoffs. It’s a forgivable loan of up to 2.5 times your average monthly payroll, and an interest rate of 1%. Amounts used to keep employees on the payroll or to pay rent, utilities and mortgage interest will be forgiven. So for most borrowers, some or all of that loan is going to turn into a grant.
The Economic Injury Disaster Loan program (EIDL), run under the Small Business Association, isn’t new. But it’s getting quite a workout as we navigate the economic ramifications of the coronavirus pandemic. The CARES Act, the $2.2 trillion economic stimulus package signed into law on March 27th, beefed up the benefits available under the program while expanding eligibility.
The massive $2.2 trillion CARES Act, signed into law on March 27th, includes direct cash payments, called Economic Impact Payments, to most American taxpayers, to be distributed as soon as federal officials can figure out how. The Act authorized a tax-free payment of up to $1,200 to every American worker or retiree with a Social Security Number, to include green card holders and permanent residents. The government will also pay $500 for each qualifying child in the household. You can still qualify, even if you owe back taxes, or you have defaulted on a federal student loan. The benefit does not have to be paid back
The federal government is providing sweeping relief to most federal student loan borrowers. The CARES Act provided a number of breaks for student loan borrowers, who collectively now owe $1.6 trillion in federally-guaranteed student loans.