IRS Announces Moratorium on Processing of Employee Retention Credit (ERC) —
IRS Announces ERC Moratorium —

Frequently Asked Questions (FAQs)

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Yes, many of 1st Capital Financial’s financing products and small business services are available in all 50 states.

No, there are no application fees or obligations associated with using tools on this site (i.e. there are no hidden fees).

The privacy and security of your data is our top priority. We have implemented best practice security protocols that are consistent with leading financial institutions, including 256-Bit SSL encryption, reCAPTCHA protection, and routine monitoring. 

1st Capital Financial is a leading authority for small business lending — loans, financing, and lines of credit — and professional employee retention credit (ERC) services. We employ an extensive partner network, over twenty-five years of industry experience, and a client-centric approach for thousands of small businesses each year.

Small Business Financing

The basic eligibility requirements for most SBA loan programs involve each of the following:

  • An Acceptable Personal or Business Credit Score
  • A For-Profit Business Status 
  • A U.S.-Based Location and Operations
  • Adherence to the SBA’s Business Size Standards
  • A Qualified SBA Industry
  • A Qualified Owner
  • Owner Support and Funding

The sooner you connect with 1st Capital Financial’s team, the sooner we will be able to get to work on your behalf. Approval times and transfers of funds vary by product, lender, and client application. 

If timing is a concern, let us know!

Yes, 1st Capital Financial welcomes all small business owners and entrepreneurs no matter their credit score. If you have been turned down by traditional lenders due to poor credit history, we encourage you to give us a call. We are honest and transparent with all our clients about their options.

1st Capital Financial’s team is dedicated to helping small business owners and entrepreneurs secure the type(s) of funding that are best suited to their needs and circumstances. We have partnered with over 190 banks, non-banks, and private investors to offer our clients greater flexibility and better rates. Some of our financing options include:

  • SBA 7(a) and 504 Loans
  • Business Lines of Credit
  • Business Term Loans
  • Commercial Real Estate Loans
  • Bridge Loans
  • Private Money Loans
  • Merchant Cash Advances
  • Equipment Financing
  • Invoice Factoring

Employee Retention Credit

ERC Bridge Financing

Funds will typically reach a business’s bank account within 24 hours once approved, but it can take up to three business days, depending on the bank.

ERC Bridge Financing proceeds can be used for any business expense. Unlike other COVID-19 relief programs, there are very few restrictions regarding businesses’ use of their refund.

In most cases, the following three factors determine whether a business will qualify for an ERC Bridge Loan or ERC Claim Buyout:

  1. The business must have submitted a valid Employee Retention Credit (ERC) claim of $75,000 or higher with the IRS.
  2. The business must have been operating since at least February 2020.
  3. The business owner, or the business, must meet credit approval or lien assessment requirement.

IRS processing for the Employee Retention Credit (ERC) can take up to ten months. This timeline is too long for businesses tackling rising inflation, higher interest rates, and limited access to capital. ERC Bridge Financing allows businesses to access their refund in days and use it wherever it’s needed.

Employee Retention Credit (ERC) Bridge Financing refers to 1st Capital Financial’s solution for businesses that do not want or cannot afford to wait for the IRS to process their ERC refund. By applying for an ERC Bridge Loan or an ERC Claim Buyout, businesses can advance up to 85% of their refund in a matter of days.

ERC Filing Service

A full ERC audit may take three to six months or more to conclude. What’s more, the IRS will not reimburse you for time lost or legal representation, regardless of the outcome. It is considered your fiscal responsibility to always be prepared for an ERC audit.

No, the Employee Retention Credit (ERC) program is not a scam. However, the IRS has repeatedly cautioned against using third-party ERC processors that are not credible.

Yes, if you disagree with your ERC auditor’s determination, you may file a written protest for an Appeals conference or hearing with the IRS’s Independent Office of Appeals.

If the IRS determines there are discrepancies in your ERC claim, they might adjust your tax liability, which could result in additional taxes, penalties, and interest.

Yes, a select number of the best ERC processing companies offer ERC Audit Protection with their services. However, you should confirm that your ERC preparer’s coverage is more than basic assistance with IRS communications and documentation. ERC Audit Protection should be interpreted to mean your preparer will (1) defend their position, (2) reimburse their service fee(s) and cover the cost of any penalties assessed if your refund is disallowed, and (3) be operating until the statute of limitations expires.

The short answer is yes. Whether or not your ERC claim will be audited, however, depends on several factors, including the eligibility criteria applied, the accuracy of your qualified wage calculations, the size of your refund, and the credibility of your preparer. You may also be selected at random for an ERC audit.

If your business was negatively impacted by the COVID-19 pandemic, but your CPA believes you’re ineligible — we still encourage you to apply.

It is not uncommon for CPAs, accounting agencies, or even Chief Financial Officers (CFOs) to get it wrong. The Employee Retention Credit (ERC) is a complex program and the IRS has released a number of warnings.

1st Capital Financial does not submit claims for businesses that’re ineligible. We take the time necessary to conduct our due diligence, present our assessment, and let our clients decide whether or not to proceed.

No, there is not. 1st Capital Financial’s clients only pay a 15% contingency fee, with no additional costs, and are never asked to sign an agreement before their ERC assessment is received. Our assistance and due diligence are free of charge.

We encourage businesses to reconsider their ERC processor if they are asked to pay additional fees for a consultation or assessment or are expected to sign an agreement before their ERC assessment is received.

1st Capital Financial charges a 15% contingency fee once your checks are received from the U.S. Treasury. There is no upfront cost.

Other major ERC processors charge up to 30% with additional upfront costs (e.g., Consultation Fees or Assessment Fees).

Most business types, including hospitals, universities, and nonprofits, may be eligible for the ERC. The following list represents just a couple dozen examples we have experience with:

  1. Art Galleries
  2. Breweries, Distilleries, and Wineries
  3. Theaters and Live Arts
  4. Childcare and Behavior Centers
  5. Restaurants
  6. Events Venues
  7. Hotels
  8. Non-Profits
  9. Churches
  10. Medical Practices
  11. Dentists and Orthodontists
  12. Law Firms
  13. Construction and Real Estate Developers
  14. eCommerce Businesses
  15. Cannabis Businesses
  16. Tobacco and Smoke Shops
  17. Startup Businesses
  18. Barbershops, Cosmetologists, Salons, and Spas 
  19. Private Schools and Universities
  20. Manufacturing Businesses
  21. Liquor Stores
  22. Car Dealerships
  23. Automotive Repair Businesses
  24. Assisted Living Services

Do not worry if your business type is not listed above. We have filed ERC claims for businesses in more than 65 different industries. If you are uncertain of your business’s eligibility, we encourage you to give us a call at +1 (833) 317-8227.

For more information, check out this article: The ERC Eligibility Requirements Employers Need to Know in 2023.

1st Capital Financial’s ERC Filing Service is available to qualifying employers in all 50 states, including:

  1. Alabama
  2. Alaska
  3. Arizona
  4. Arkansas
  5. California
  6. Colorado
  7. Connecticut
  8. Delaware
  9. Florida
  10. Georgia
  11. Hawaii
  12. Idaho
  13. Illinois
  14. Indiana
  15. Iowa
  16. Kansas
  17. Kentucky
  18. Louisiana
  19. Maine
  20. Maryland
  21. Massachusetts
  22. Michigan
  23. Minnesota
  24. Mississippi
  25. Missouri
  26. Montana
  27. Nebraska
  28. Nevada
  29. New Hampshire
  30. New Jersey
  31. New Mexico
  32. New York
  33. North Carolina
  34. North Dakota
  35. Ohio
  36. Oklahoma
  37. Oregon
  38. Pennsylvania
  39. Rhode Island
  40. South Carolina
  41. South Dakota
  42. Tennessee
  43. Texas
  44. Utah
  45. Vermont
  46. Virginia
  47. Washington
  48. West Virginia
  49. Wisconsin
  50. Wyoming

The same applies to the company’s ERC Partner Programs.

Yes. There are no restrictions related to the ERC program for businesses that received an EIDL loan.

Yes, however — any employee wages that were claimed under the WOTC must be excluded from your ERC claim (i.e., no “double-dipping”).

A Severely Distressed Employer is an employer that experienced a ninety percent (90%) or greater loss in gross receipts when compared to the corresponding quarter in 2019. Severely Distressed Employers are subject to fewer program restrictions and may receive a higher credit amount.

Businesses can claim up to $26,000 per employee for the Employee Retention Credit (ERC) broken down as follows:

  • For 2020, you can claim up to fifty percent (50%) of qualified wages and health plan expenses for a maximum credit of $5,000 per employee for the year.
  • For 2021, you can claim up to seventy percent (70%) of qualified wages and health plan expenses for a maximum credit amount of $7,000.00 per employee per quarter and $21,000 for the year.

Yes, absolutely! If your business was started after February 15, 2020, and your gross receipts have not exceeded $1M annually, you may qualify for the ERC program as a Recovery Startup Business.

Recovery Startup Businesses do not need to demonstrate a reduction in gross receipts to be eligible for ERC, and credits apply through Q4 of 2021.

No, the IRS does not consider ERC refunds for income tax purposes.

However, you are required to reduce your business’s deductible wage expenses by the refund amount you receive. We encourage you provide this information to your current CPA or accounting agency.

As soon as you’ve completed your ERC application and submitted your documentation, our CPAs will get to work on a comprehensive assessment for your business. This process takes 5-10 business days. Assuming you decide to move forward, your amended employer tax returns (i.e., Form 941-Xs) and supporting documentation are filed with the IRS.

IRS processing of ERC claims is now expected to take 10-16 months with the moratorium.

For immediate access to your ERC refund, 1st Capital Financial offers ERC Bridge Financing (ERC Bridge Loans and ERC Claim Buyouts).

No, as a majority owner, you do not qualify for the ERC program.

It is possible, yes. Minority owners (those with less than 50% ownership) that are W2 employees, and any family members that are also W2 employees, are eligible.

Majority owners (those with greater than 50% ownership), and their immediate family members, do not qualify.

No, but remember that your payroll taxes determine the amount you receive from the ERC program, not your income taxes. The IRS treats ERC funds that do not apply to your owed payroll taxes as an “overdeposit” of taxes.

No, this is not a lending program. The U.S. Treasury issues tax refunds, so eligible employers are guaranteed to receive their refunds.

Note the IRS is frequently changing eligibility requirements for the program so we encourage employers to file their claims sooner than later.

Yes, there are two possible qualifications for 2020: a reduction in revenue or a “full or partial shutdown of your business due to COVID-19”.

The IRS describes the latter scenario as “a required partial or full shutdown of your business during 2020” by a government authority. Applicable events include operations limited by commerce, the inability to travel, or any restrictions on group meetings.

Here are some examples:

  • A restaurant that was forced to close or limit its on-site dining (such as having to close down every other table due to COVID-19 restrictions)
  • A business that needed to meet with clients in person, but due to COVID-19 restrictions, had to cancel these meetings
  • A business that reduced its operating hours because of COVID-19 restrictions and cleaning requirements
  • A business that delayed its production schedules because of supply chain disruptions
  • A business with a planned event that was canceled or forced to restrict the number of people who could attend due to COVID-19 restrictions

Yes, you certainly are! The Taxpayer Certainty and Disaster Tax Relief Act (enacted 12/27/2020) modified the ERC eligibility guidelines so that PPP applicants could also take advantage of the ERC program. However, you cannot claim the same dollar-for-dollar funds. We take this into account when processing your ERC claim.

ERC Partner Programs

Decide which ERC Partner Program fits your business and submit an ERC Partner Application. The 1st Capital Team will review your application, confirm that you are a good fit, and reach out to get you started.

Nope! Applying for, and participating in 1st Capital Financial’s ERC Affiliate Program, ERC Referral Program, or ERC Affiliate Marketer Program is entirely free. There are also no minimum sales requirements or quotas required to earn a commission.

Our ERC Partner Programs give you an edge, keep you involved, support your sales and marketing initiatives, and arm you with expert training to deliver the best quality service. We are not an ERC Mill or ERC Popup; we are a reputable business that takes pride in delivering the best quality of service to our clients and partners.

Certainly not! While 1st Capital Financial’s ERC Affiliate Program is best suited for B2B service providers, the company’s ERC Referral Program is open to everyone. 1st Capital Financial’s ERC Affiliate Marketer Program is also not exclusive to B2B businesses, but the program is mainly for content creators.

At a glance, 1st Capital Financial’s ERC Affiliate Marketer Program allows digital marketers and influencers to earn exceedingly generous commissions using a dedicated affiliate link in content such as blog posts, email marketing campaigns, banner ads, webinars, and more. Joining the program allows marketers to add value to their preferred channels and create new revenue streams.

1st Capital Financial’s ERC Referral Program is the easiest way for anybody to earn commissions — a percentage of revenue for every qualifying ERC client — with little to no effort. ERC Referral Partners get rewarded for recommending 1st Capital Financial to other employers in their network. They simply refer clients, and we do the rest.

In its simplest form, 1st Capital Financial’s ERC Affiliate Program allows B2B service providers (e.g., brokers, agents, consultants, accounting firms, attorneys, CPAs, and tax agencies) to expand their existing services, introduce new revenue opportunities, and improve client retention by utilizing 1st Capital Financial’s ERC filing service. ERC Affiliates prequalify ERC clients and collect documentation before transferring the workload to 1st Capital Financial. ERC Affiliates also get access to higher commission rates, exclusive training, priority support, and many other resources to ensure their success.

We would love it if you were part of the 1st Capital Financial family, but no — you are not required to be a 1st Capital Financial customer to participate in any of the company’s ERC Partner Programs.

ERC Consultations

Don’t worry. If you are unsure about any questions, simply provide your best guess or select “I am not sure.” You will have an opportunity to discuss your business’s COVID-19 experience at length during your consultation.

No, there’s no cost to get started with 1st Capital Financial’s ERC Filing Service, ERC Bridge Financing, or ERC Partner Programs.

An ERC consultation is a 10-minute phone call and an opportunity to learn more about 1st Capital Financial’s ERC Filing Service, ERC Bridge Financing, or ERC Partner Programs. We also use this time to assess your needs and goals so that we can help you determine the best path forward.

Get Started

How Can We Help Your Business?

Speak with a Financing Expert

Get all your questions answered in a brief call with one of our small business financing experts.

Speak with an ERC Specialist

Learn more about the ERC program, our ERC Filing Service, and our ERC Bridge Financing in a brief call.​

Submit an ERC Application

Find out if you're eligible for the ERC and receive a complimentary estimate in as little as eight minutes.

Your Financing Consultation is Confirmed

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Your ERC Consultation is Confirmed

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Your ERC Partner Application has been received!

A team member will contact you within 1 to 2 business days. Welcome to the 1st Capital family.