Keeping our small businesses afloat is essential to our nation’s overall economic stability. Almost half of our country’s working population works at or owns a small business! To help, President Biden signed into law a $1.9 trillion stimulus package known as the American Rescue Plan Act of 2021. While much of the media’s attention is on the $1,400 stimulus checks, many small business owners will find added relief in the bill’s spending provisions. These provisions seek to aid small businesses hit hardest by the COVID-19 pandemic, especially restaurants.
Here are some highlights of the bill’s impact on the federal resources provided by the Small Business Administration (SBA):
Restaurants, Bars, and Entertainment Venues - The new stimulus bill allocates funding grants for a new measure called the Restaurant Revitalization Fund to provide a critical lifeline for the food and drink industry. The bill also allocates additional funding for the Shuttered Venues Operators Grant program. Grants are not loans and do not need to be repaid or forgiven.
- $28.6 billion to Restaurant Revitalization Fund. The fund is designed specifically for food and beverage business owners with 20 or fewer locations. The funds’ grants are equal to the amount of the business’s pandemic-related revenue loss. The grant money can be spent to help meet payroll and pay other operating expenses, including benefits programs (up to $100,000 per year). Grants max out at $10 million per company and $5 million per physical location. The program prioritizes food and beverage businesses owned by women, veterans, and socially and economically disadvantaged individuals during the first 21 days. Restaurants that have received PPP loans can still apply for a grant through this fund. However, their PPP loan amount may be deducted from their eligible grant total.
- $1.25 billion to Shuttered Venue Operators Grant (SVOG) program. Venues in the entertainment industry that did not receive or apply for PPP funding after December 27, 2020, can apply for additional federal aid from the already existing SVOG program. Eligible venues include movie theaters, museums, concert venues, performing arts centers, and the like. Venue operator businesses can apply to receive grants of up to 45% of their gross earned revenue (up to $10 million). $2 billion of the total funding is being reserved for venues with up to 50 full-time employees.
PPP and Emergency Loan assistance - The American Rescue Plan Act renews funding for forgivable loan programs administered through the SBA. However, it does not extend the deadline to apply, which is still March 31, 2021.
- $15 billion to Economic Injury Disaster Loan (EIDL) program. The SBA has been directed to focus on awarding the additional $15 billion in funding to businesses in underserved communities, especially those that are minority-owned. The requirements for applying for EIDL aid haven’t changed. Lenders are instructed to prioritize providing grant amounts of $5,000 to hardest-hit businesses with less than 10 employees first and $10,000 advance funds to EIDL advance grant applicants in low-income communities if they never received funding.
- $7.25 billion to Paycheck Protection Program (PPP). The SBA has expanded eligibility for obtaining PPP loans to include some veteran and digital news organizations. It has also changed the prior affiliation rules for larger non-profits to include almost all entities listed as 501(c). These include labor, horticultural and agricultural organizations, clubs, cooperative utility companies, and more. The PPP has tightened its eligibility requirements for non-profits by excluding those with lobbying activities of more than $1 million (or 15% of the company’s activities).
- $10 billion to the State Small Business Credit Initiative (SSBCI). These funds will offer small business support at the state and local levels in the form of low-interest loans and other types of financial assistance. Business owners should keep an eye out for this type of local aid to see if they qualify.
More information on these federally-funded opportunities for small businesses can be found on the Small Business Administration’s website. As always, we’ll continue to monitor the impacts of this newest COVID-19 relief legislation and share updates if they become available. If we can answer any questions for you, please don’t hesitate to reach out.
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