What Is an ERTC Advance?

August 28, 2023
Dayes Law Firm

If you were a business owner in 2020 and 2021, you likely saw a decline in supply, demand, and staff. You may even have had to shut down business operations due to a government mandate. 

To support businesses during this difficult time, the CARES Act of 2020 introduced the Employment Retention Tax Credit (ERC or ERTC). An ERTC advance is a short term loan provided by a loan company in response to the demand from companies that filed claims and were waiting for the IRS to process the claim.

What Is the ERTC?

The ERTC is a tax credit that incentivizes employers to keep employees on their payroll. In 2020, the ERTC paid qualified employers for 50% of their full-time employees’ wages and health benefits for up to $10,000 per employee. These creditable wages increased to 70% of full-time employees’ wages with the Consolidated Appropriations Act in 2021.

Small businesses (100 employees or fewer in 2020; 500 employees or fewer in 2021) may collect ERTC benefits.

While this credit helped many businesses, it can take months for employers to collect the funds. 

What Is an ERTC Advance?

An ERTC advance, or ERTC loan, provides access to ERTC funds through a loan service. 

How To Qualify for an ERTC Advance

To qualify for an ERTC advance, you first need to qualify for the ERTC. Loan services will evaluate your application to determine its eligibility, along with the anticipated tax refund. You qualify to claim the ERTC if: 

In 2020:

  • Your business experienced a partial or complete shutdown due to a government order
  • Your business experienced a 50% revenue loss compared to 2019

In 2021:

  • Your business experienced a partial or complete shutdown due to a government order
  • Your business experienced a 20% revenue loss each quarter up to December 31, 2021, when compared to 2019

Contact a Tax Attorney for Help Filing an ERTC Claim

At Dayes Law Firm, we’ve helped hundreds of businesses make ERTC claims. Contact us today at (800) 503-2000 to schedule a free consultation.