Hannah is the business owner of a beauty salon in Seattle, WA. Her business was founded in 2013 and maintained 10-20 employees between 2019 and 2021. Hannah’s ERC application was her first introduction to CARES Act funding; she did not receive a Paycheck Protection Program (PPP) loan. Hannah filed her $43,086 ERC claim with her bookkeeping service.
This case study is based on a real NEWITY Member and details NEWITY’s ERC Advance process, including what to expect as well as an accurate ERC Advance claim calculation for this business. Note, some details have been altered for privacy.
Hannah’s salon was heavily impacted by government shutdowns and her revenue declined during 2020 and 2021. The lack of foot-traffic caused a steep revenue decline even after indoor capacity limits were lifted.
Looking for guidance on where she could secure capital, Hannah turned to her bookkeeping service, who helped her file for the Employee Retention Credit (ERC). Her bookkeeping team told Hannah that she could expect to wait up to 9-12 months for her cash refund per standard IRS processing times. While Hannah was happy to know capital was coming, she needed the cash from her ERC refund to invest in her salon. After a quick search online, Hannah found NEWITY’s cash now option through ERC Advance, which allows businesses who already filed for ERC to receive cash for their claim in as few as five days from approval. Hannah decided it would be best to re-invest in her salon now rather than wait for the IRS to send her check.
Step One: Become a NEWITY Member
Since Hannah learned about NEWITY through her ERC Advance search, she needed to create a free NEWITY account. This step only required her to input her email, create a password, and enter basic business information, her name, and contact information.
Step Two: Submit ERC Advance Application
Once Hannah set up her account, she started the ERC application immediately. The first prompt asked if she had already filed an ERC claim. After selecting that she already filed for ERC, Hannah entered information about the provider who filed her original ERC claim, the quarters and associated dollar amounts that were filed, and reason for qualification (government shutdown, revenue decline, or recovery startup business). The application then asked Hannah if she had previously received any other government funding, such as PPP, to which she selected “no.”
Hannah then entered more specific information about her salon including her business structure (ex: S-Corp, C-Corp, LLC, etc.), and tax identification number.
With her application over halfway complete, she entered information about the business’ authorized signer, which happened to be herself, since she owned 100% of the business. After typing in her information, she was ready to know if she would be approved for ERC Advance.
Hannah was elated that she qualified for NEWITY’s ERC Advance program! NEWITY’s ERC Advance program showed her that the $43,086 ERC claim she filed and may not have received for 9-12 months could be turned into $36,623 in as little as five days.
To complete her application, Hannah uploaded all required supporting documents from her bookkeeping service.
Step Three: Receive Cash for Her Claim
Four days after Hannah was approved for ERC Advance, she received $36,623 in her bank account for her ERC claim. The cash flow timing was ideal for her business, allowing Hannah to instantly invest in her salon by upgrading the salon’s booking system, placing new online ads, and buying a new range of products to sell to customers.
How To Apply
To see if you qualify for ERC Advance, visit NEWITY’s portal and select the ERC tile to begin the brief application.