Navigating Financial Relief Available to Video Production Companies and their Employees Affected by COVID-19

Navigating Video Production Financial Relief

With initial summations pointing at potentially ​$2.7 trillion lost​ in global output as a result of the COVID-19 pandemic shutdowns, you’d be hard-pressed not to find an industry that’s really hurting right now. Spending on digital media, in general, is estimated to take a ​33% hit​ over the next 3 months, and video production firms will no doubt be feeling that impact for some time and need significant financial relief.

That being said, we think it is more important than ever for communities to band together as allies in this time of shared suffering. For our colleagues in video production services and digital media creators here in Washington D.C., and beyond, we have taken the time to compile a comprehensive list of resources available (public and private) for those who need a little help maintaining cash flow and income for their companies as they fight COVID-19.

Government & tax relief programs

Primarily there are three specific forms of relief worth considering for a video production company owner/operator, as far as federally funded small business relief is concerned: available tax benefits, the Paycheck Protection Program (PPP), and Economic Injury Disaster Loans (EIDLs).

Your taxes are an easy place to start. The most important of the changes made that could benefit you immediately is the ​deferment of payroll taxes until the end of 2022​ (however at least half must be paid by Dec. 31st, 2021). Business owners can also postpone payment of Railroad Retirement taxes, FICA taxes, and half of the SECA tax.

A somewhat trickier tax relief program is also available to you when making your next filing, and that is the ​Employee Retention Credit ​(EE). Crafted to support all businesses trying to maintain consistent staffing levels throughout this crisis’ economic onslaught, it provides a refundable tax credit for half of up to $10,000 in wages paid by eligible companies to their employees who have had their revenue impacted by the pandemic (in either lost income or suspension of business in the area).

If you find your production company is suffering especially severely without fresh projects coming down the pipeline for the foreseeable future, for the good of your livelihood and that of your crews’ it might be worth considering the aforementioned ​Paycheck Protection Program (PPP)​ and Economic Injury Disaster Loans (EIDLs).

As a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES), the PPP was established in an effort to protect the paychecks of America’s labor force, and you or your employees. It provides forgivable loans of up to $10,000,000 to cover payroll costs — all forms of wages, benefits, paid leave, and more up to $100,000 per employee — in addition to rent, utilities, mortgage, and interest on debt obligations.

Most video production companies and freelance video contractors won’t have a difficult time meeting eligibility requirements as the principal criteria are that companies employ less than 500 employees or meet applicable ​Small Business Association (SBA)​ employee-based size standards for their industry. These are partially forgivable, two-year loans with an interest rate of 1% and six months of payment deferment, but the only forgivable portion of the loan is funds spent during the first eight weeks after the loan’s origination and ​must be requested​, it is not automatic.

The Coronavirus Preparedness and Response Supplemental Appropriations Act previously added additional funding for its ​Economic Injury Disaster Loans (EIDLs)​, also regulated by the SBA and provided by its approved lenders. These are low-interest (​3.75% APR for SBM’s, 2.75% for nonprofits), long-term (up to 30 years) loans of up to $2,000,000 meant to cover the majority of operating expenses for those businesses impacted by COVID-19.

If planning on using any of these services please be aware of the way they conflict with each other (as is the case with the PPP loans and the Employee Retention credit; you ​cannot utilize both​). Be sure to confer with your financial services or accounting department to make the decision that’s best for your company.

Noting that the services offered by the federal government are in some ways lacking or difficult to access right away, many state and local governments have also stepped up to the plate. For our Washington D.C. video production company colleagues the mayor’s office is funding its own micro-grant program and services​, as is the ​Maryland Department of Commerce​ for our fellow Maryland video marketing firms across the Potomac. Be sure to keep checking these as often they will end their registration periods to review applications and then re-open again later.