Still waiting for your Employee Retention Credit(ERC) refund?

So, you’ve made a claim with the government for your ERC refund. Great! However, as many businesses have experienced, prepare to wait. The government is severely backlogged in processing ERC refunds and typical turn times range between 8-12months.  The good news is there are programs available to businesses with valid, pending refund claims that will purchase your refund today, allowing you to accelerate your refund timetable.

What is an ERC?

First, let’s cover what is the ERC? The ERC provides significant financial relief for businesses that experienced revenue losses due to the COVID-19. Initially created by Congress as a part of the CARES Act, in March 2020, the ERC has been expanded twice to help more struggling companies reduce their federal tax bill. To take advantage of the ERC, eligible employers can file Form 941-X for each quarter they paid qualifying wages to employees from March 13, 2020, to December 31, 2021,and claim the credit retroactively. Eligible companies can receive a refund that can return up to $26,000 per employee depending on wages, health expense and other personal costs business owners already previously paid through the qualifying period.  If you haven’t applied for your ERC refund, you can learn more about that process in our post, “Am I eligible for the Employee Retention Credit” or contact us directly as we have partnered with CPAs and Attorneys who specialize in ERC claims.

What is ERC Financing?

An ERC financing program will purchase a percentage of your refund today.  Allowing you to take advantage of near-term opportunities like purchasing equipment, special inventory buys, remodeling, tech upgrades or hiring more talented people. The financing program purchases the percentage of your refund at a discount, in exchange for funding you a lumpsum today. The discount represents the fee or amount retained by the program for carrying the costs of money funded to the business, until the ERC refund is officially received from the government. Because it is a purchase, there are no payments and no out of pocket fees between receiving funds and when the business receives their ERC refund.

Benefits of ERC Financing

There are a number of benefits to ERC financing

·        There are no out-of-pocket expenses

·        There are no payments associated with the financing. This is not a loan or a sales-based financing product.

·        Funds today vs. waiting up to 12 months

·        No obligation or upfront fees to apply

Get started on your ERC financing today

The good news is, the process will utilize most of the same documentation provided in the initial ERC claim.   Businesses most likely engaged a professional like a CPA, tax attorney or business broker to assist them with the claim. Capital Reaction specializes in ERC financing and can work seamlessly with your ERC claim professional to explore your financing options. Learn more about ERC Financing here

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Footnote

This post offers professional opinion and should not be construed as professional or legal advice. Please consult a licensed professional about your particular business situation.

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