When you think about investing in your business, what comes to mind? For many, the first few ideas will be office space, equipment, infrastructure, or salaries. But before you jump to one of those conclusions, it’s also worthwhile to take a step back and consider bigger IT concerns.
When you or your employees need help with technology, who do you call? Have digital threats like ransomware or data breaches taken a toll on your company—or other companies in your industry? Have your employees received cybersecurity training to identify these threats before they escalate? Has your business struggled to upgrade old computers or adopt new technologies?
Giving these important issues a long, hard look can pay big short-term and long-term dividends. Here and now, you can prevent downtime, keep remote workers connected, and mitigate the skyrocketing costs of malware or phishing attacks. In the future, an enhanced focus on cybersecurity and IT strategy can deliver increased revenues, better employee retention, and heightened flexibility.
A Real Return on Investment
The good news for businesses across North America is that relief funds intended to ease the ongoing impact of the COVID-19 pandemic can be used for certain IT functions like software and cloud services.
In the United States, up to 40% of funding provided by the Paycheck Protection Program Second Draw (or PPP-2) can be used for “any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records, and expenses.” (Source: SBA 13 CFR Parts 113, 120, and 121.)
In Canada, some programs like the CEBA (Canada Emergency Business Account), HASCAP (Highly Affected Sectors Credit Availability Program), BCAP (Business Credit Availability Program), and RRRF (Regional Relief and Recovery Funds) may also allow IT costs to be covered.
What Does That Mean Exactly?
In the case of the Paycheck Protection Program, a fresh injection of funds totaling nearly $300 billion was assigned as part of last December’s $900 billion COVID-19 relief package. Included in PPP-2 was a provision allowing 40% of the loan amount spent by each business to be used on non-payroll expenses, including IT investments that support day-to-day operations. This includes everything from accounting software to human resources applications and monthly charges for cloud services. The remaining 60% of the PPP-2 loan amount must be spent to keep employees on the payroll.
This represents a significant shift from the first round of PPP funds approved in March 2020 at the beginning of the pandemic. It’s also fantastic news for business owners and managers who may want to explore a shift to the cloud or other IT investments but have been limited by business challenges presented by COVID-19.
Is My Business Eligible for PPP-2 Funds?
This second round of funding is focused on businesses who didn’t receive relief in the first round of PPP funding—especially those owned and operated by minorities and women, along with certain nonprofits and cultural venues struggling to make up lost revenue.
The criteria to qualify remains unchanged for first-time PPP applicants. However, small and medium-sized businesses that have already received funds from the program are eligible for a second loan if they can demonstrate a significant loss—a 25% reduction in gross revenue in any quarter of 2020—and have 300 employees or less. Similar to the first round of PPP funding, borrowers are eligible for 100% loan forgiveness if they meet certain guidelines established under last year’s CARES Act and other Small Business Administration rules. Eligible borrowers have until March 31, 2021, to apply for new PPP loans.
Forward-thinking IT investment can make a huge difference for your business by enhancing data protection, cybersecurity defenses, and other key operational strategies. CMIT Solutions works with clients like you across North America to develop IT budgets that incorporate funds available today with projected future revenues. That means you can keep long-term growth in mind while avoiding the exorbitant short-term costs that stack up when technology fails.
Have questions about the new software and services clause in PPP-2? Want to get IT struggles under control? Ready to empower your employees and invest in your company’s growth? Contact CMIT Solutions today—we’re here to help.