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ERTC Delays Hurt Small Businesses

Thousands of small and mid-size businesses across the U.S. did the right thing by keeping employees on payroll during the COVID-19 pandemic. Fast forward to 2023, and many of them are still waiting for their ERTC funds due to an inexcusable backlog at the IRS. As these businesses wait, they face layoffs, high-interest loans, investment freezes, and closure.
The testimonials we have collected span dozens of industries across 41 states and paint the harsh reality of this avoidable situation. We’ve included some of their pleas for their deserved ERTC funds below:



Massachusetts-based company shutters manufacturing operation


We have now closed our manufacturing. The money would have gone a long way to expand our options, but since we never received the monies, that was one more reason to shut our manufacturing operations. This was an $8 million manufacturing operation and unique to the USA.  

We had to lay off 50 people. It also affected our supplier and customers. If we do receive funds soon, we are looking at new options to renew our manufacturing in a smaller capacity. We have the knowledge in our industry that is known worldwide. We are trying to expand into high value products for military, police, and sports equipment. If this gets delayed even more, then even that option will go away. 




Minnesota media company waits two years for $660K in ERTC funds


Back when the pandemic began, the live event production industry came to a screeching halt. As an event production company, the impact of the pandemic was swift and dire as the ban on large event gatherings caused virtually all of our revenue to evaporate in a few short months.

However, as a 100% employee-owned company, we felt it was our responsibility to do everything in our power to keep our employees, our owners, on payroll during those difficult and uncertain times. The PPP grants and ERTC funds were the lifeline that our company so desperately needed. The PPP grants were an instant relief and the assurance of the ERTC funds is what allowed us to keep all of our employees on payroll without having to reduce wages.

While the PPP grants were received almost immediately, we have yet to receive over $660,000 in ERTC funds that we were counting on as an organization to meet payroll and operating expense needs. Our applications for ERTC funds were sent to the IRS nearly 2 years ago and we have yet to receive a dime forcing us to obtain loans and hold a continuous balance on our line of credit which has cost our company and our employee owners tens of thousands of dollars over the last 2 years with no end in sight. We are now reaching an unfortunate financial situation which may force our hand in making tough decisions that will impact the livelihoods of some of our employee-owners by terminating jobs and cutting payroll costs that we would not otherwise have to do.




South Carolina beauty salon saddled with crippling tax debt after waiting two years for funds 


We have been waiting on our ERTC funds for two years. Our company needs this money due to the losses we have had over the last three years because of COVID. We have also had to pay taxes on the money we are receiving for 2021 and we had to finance the tax payments with the IRS because the company does not have the money to pay the taxes due to the losses we suffered during COVID.

Our company also had to use our line of credit in order to stay in business. The ERTC money is needed to pay the taxes on money we have not yet received and to help our company get back on track by paying off debt we took on due to COVID.




California insurance agency lays off nearly 90% of workforce 


Our company had to undergo restructuring in February 2023 and we dismissed 87% of our employees. Without the ERTC credit we were relying on, we had to borrow money to pay out our employees’ accrued PTO balances, amounting to over a half a million of payroll liability. This posed a hardship for us, but we did the right thing by putting our employees’ interests first.




Pennsylvania advertising company awaiting $600K forced to borrow at high interest rates 


Our company filed its first claim through our payroll vendor 26 months ago. We filed a total of four claims worth almost $600,000; the newest of them is 19 months old.

We’re a small, family-owned company with 26 years in business and about 70 employees. Keeping people working during the COVID crisis wasn’t easy for us, but we did our best. In the aftermath, we’ve had to borrow money at high interest rates to support our operation and defer investments in our business because of the lack of attention to our ERTC claims.

We desperately need these ERTC funds. Please do everything in your power to help the IRS resolve this backlog so we can get the credits we're entitled to. Thank you for your prompt attention to this issue.




Colorado bridal company enduring financial strain, nearing daunting deadlines


In addition to the financial struggles that we have endured due to the delay in payment, we have also already paid taxes on the amount that was not received.

This has created more debt and financial strain on the business. We are reaching some of our own deadlines and cut-off dates due to the uncertainty of these funds.




Florida software company $60K in debt


The ERTC credit is something we have relied on to shore up our company finances. Currently we are servicing about $60,000 in debt which we accumulated due to economic impacts from COVID-19. These ERTC funds are supposed to directly support small business like mine with issues related to COVID.




Texas construction company threatened with equipment building lock-out

As an employer in the construction industry, it is difficult to find new hires, so it's imperative to retain the employees we have. Every year, we try to give our workers raises or other benefits, but with the cost of new construction materials, it's been difficult to do. This tax credit will go a long way toward keeping our workforce engaged.

I’ve had to pull money out of my retirement account, and I don't have much left. The landlord made us pay rent even though we were shut down for some months during this horrible disaster. They threatened to lock us out of the building where all of my equipment is. We are due approximately $100,000 in ERTC money and don't know what to do. 




Alabama HVAC company in desperate need of ERTC funds amid supply disruptions


Our company has struggled through higher labor cost due to additional procedures and restrictions we have incurred due to the COVID pandemic. Disruptions in supply and product availability have caused the company to lose revenue.

Continued increases in cost due to supply disruptions and inflation have been difficult to overcome in our markets, therefore lessening margins. In total, all these issues have made it difficult to maintain our levels of employment much less grow as a company.

They have also caused an increase in our debt load in order for the company to overcome these issues. These ERTC funds would assist us in reducing our debt due to increased labor cost and price increases and put us back on track to being a healthy growing company.




Kansas construction company forced to nix raises and other benefits


As an employer in the construction industry, it is difficult to find new hires, so it's imperative to retain the employees we have. Every year, we try to give our workers raises or other benefits, but with the cost of new construction materials, it's been difficult to do. This tax credit will go a long way toward keeping our workforce engaged.




California healthcare company closes operations center, lays off employees 


We have been waiting for these funds to arrive for almost two years now. We had to lay off over a dozen individuals last year as well as close one of our centers of operations in order to survive and stave off potential bankruptcy.

Given that we are in the healthcare field for substance use disorder, our inability to keep the doors of our centers open has impacted the lives of hundreds of our clients who are no longer able to obtain the life-saving care that they desperately need to stay away from the harmful and potentially deadly effect of drugs and alcohol. Our inability to access funds that we’ve been waiting for will further negatively impact our business and the clients we serve. We desperately need these ERTC funds.

Please do everything in your power to help the IRS resolve this backlog so we can get the credits we're entitled to.

Thank you for your prompt attention to this issue.




Utah energy company faces closure after exceeding borrowing amounts


We have exceeded all of our borrowing amounts. Within weeks we will have to close the doors. We will displace 48 employees and potentially impact other matters of national concern, classified--research and development relating to organizations such as DOE, DOD, NASA, MIT, and JPL.




Oregon technology company faces worst hit to reserve in a quarter-century


My woman-owned small business retained 100% of its employees and continued to provide full benefits throughout the COVID-19 crisis and ongoing economic downturn. Our internal financial management efforts ensured that none of our company's valued employees were released or forced to apply for state unemployment or federal aid to care for their families.

The fiscal impact on cash flow is the single-largest deficit to corporate reserve I have experienced in 25+ years in business. The ongoing backlog is creating a secondary impact to industry and threatens our ability to maintain personnel. I must now engage lines of credit and pay interest to carry payroll.

Bottom line, the failure of the government to process these fiscal credits is just kicking the can down the road and will result in the delayed demise of many small businesses unless it is immediately rectified.




Georgia small business at risk of closure


We have been waiting for over a year and if I do not receive it soon, it may require me to shut my business down. I need this credit. Please act now!                      




Tennessee construction company forced to dip into reserves 


We in good faith kept our employees working and employed with full benefits during the COVID-19 pandemic period. We tightened our spending and used our reserves and line of credit to continue to provide for our employees and their families. In no way could we have imagined it would take this long for our government to do its part. 




Missouri construction firm takes out $1.2 million loan to keep company afloat


We faced uncertain times during 2020 and 2021 and had our business severely impacted the government orders, shutdowns and other delays that cost us well over a million dollars. We did the right thing, kept our employees employed and took out a personal loan in excess of $1.2 million to continue to fund the company and keep people employed.




Wisconsin IT company struggles to meet financial obligations and maintain workforce


445 days post-submission, I am inquiring about our company's ERTC application status. As a small-mid business, the ERTC is critical to our operations and the financial stability of our employees. This credit is crucial to our company's ability to continue providing essential services to our customers while ensuring that our valued employees remain on our payroll. However, despite submitting our ERTC application promptly, we have yet to receive any updates on the status of our application. As a result, we are struggling to meet our financial obligations and maintain our workforce.




Jobs and vital treatment at risk for Michigan behavioral health organization


We provide mental health and autism treatment for children in West Michigan. We barely survived the COVID pandemic and are struggling to recover from massive financial losses.

We have been waiting since January 2022 for our ERTC funds, but life-changing treatment for children and nearly 100 good-paying jobs remain at high risk.




Arizona cleaning company witnesses worst downturn in three decades 


Businesses will always have times of struggle. Ours is no different.

In the 30 years we have been an Arizona-based business, we have survived the economy downturn of 9/11, the market crash of 2008, and a shutdown. Each time we adjusted, pivoted and come back from the brink.

Many times we didn’t take paychecks so our staff could have one. We’ve taken on second and third jobs just so we could keep our staff employed. These are not people who get a job done for us; they are family to us. The shutdown has been the worst downturn we’ve seen. 

Our business depends on businesses being OPEN. We’ve maxed out and now need help. We have always been a debt-free company and as we, the owners, are facing our retirement years, we are hoping to pass along a vibrant company to these loyal employees and not one that has insurmountable debt. Or worse, shutter the doors because we can’t stay open. 




Washington interior design company takes on thousands of dollars in added interest 


Our company had to take out a loan to support cash flow in the beginning of 2022, as we thought our ERTC would be processed in a more timely manner.

The interest alone on the repayment cost our company thousands of dollars. The uncertainty on the timing for repayment makes us cautious for hiring, investing in new goods and products, and is causing our investors to question our ability to manage the cash flow.



Click here to read about NAPEO’s grassroots efforts to clear the ERTC backlog.