To date, much of the data supporting the belief that inflation is hurting businesses on main street has been anecdotal in nature, but several recent surveys by SCORE and others is providing statistical support to this concern.

The US Bureau of Economic Analysis today issued some early-stage results for 2021, and the preliminary results were positive, for a change.  Based on their analysis, 4^th quarter 2021 GDP grew by 6.9%, the largest increase since 1984 (during the Regan Administration).  This far exceeded the estimate of 5.5% made by industry economists.  On an annualized basis, GDP rose by 5.7% vs. a decrease of 3.4% in 2020.  All subcomponents reflected an increase, including nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Consumer goods and services also increased during the period. 

With the sunset of the Economic Injury Disaster Loan program, there is little, if any, good news for restaurateurs and small business owners about any further Federal Disaster Relief Loan/Grant programs.

There are, however, some private-sector programs that may be available, albeit on a much more limited basis than their federally-backed elders.  These include:

If you are a small business owner who files taxes as a sole proprietorships; partnership; LLC or  corporation and earn more than $600 via online payment platforms, you will soon start receiving a Form-1099-K, “Payment Card and Third-Party Network Transactions” (TPSOs and EPFs).  The information you provide on this form will be sent to your client and the IRS.  As a result, your clients will, in some cases, receive a slew of these forms in early 2023.  Third-party processors such as Venmo, PayPal, Cash App, Zelle, or other vendors, will be providing these forms for you to complete and return. In addition, if you sell products via Amazon, Etsy, eBay, or at craft shows or face-to-face, you will receive the 1099-K. 

Unfortunately, the status of this program is somewhat tentative in that the Infrastructure Bill before Congress would strike the program (yet industry groups are advocating for the continuation of the program via the Build Back Better bill).  So, what should businesses contemplating applying for the tax credit do?

This program’s funds were to be used to pay employees and cover costs associated with remaining in business.  A unique feature of this program was the ability to have some or all of the debt forgiven as long as the borrower provided their lender and the SBA with proof the proceeds were used as required in the approval guidelines. 

All small business owners understand the theory of maintaining a positive cash flow in order to keep their businesses afloat.  Slow or non-existent sales and/or ever-increasing expenses cause a shortfall in available capital.  This lack of capital severely impacts their ability to respond to opportunities for growth as they are unable to purchase the equipment and or inventory necessary to meet the increased demand these opportunities bring.  Unfortunately, in every case, reality trumps theory.