- American Rescue Plan establishes new relief measures for small businesses and makes some modifications to existing programs
- $28.6 billion will go toward establishing a grant program to assist restaurants, bars, and other eateries and drinking establishments
- EIDL Advance, PPP, and Shuttered Venue Operators Grant programs receive additional funding
Summary by Dirk Langeveld
With the passage of the $1.9 trillion American Rescue Plan on Wednesday, a wide-ranging set of economic support is set to roll out after President Joe Biden signs the legislation on Friday. This includes measures such as direct payments to qualifying households, extended unemployment benefits, aid to state and local governments, and expanded child tax credit, and more.
A relatively small fraction of the bill goes to support small businesses. However, there are still several initiatives that create new avenues of relief or revamp existing programs. These include:
Grants for restaurants
Restaurants, bars, and other qualifying eateries and drinking establishments are the chief beneficiaries of small business aid under the American Rescue Plan. A total of $28.6 billion will go toward establishing a grant program for these businesses, which have proved highly vulnerable to revenue losses due to capacity restrictions and other measures put in place during the COVID-19 pandemic.
Grants are calculated by subtracting the business’s gross receipts for 2020 from its gross receipts from 2019. The program is open to entities with fewer than 20 locations that aren’t publicly traded, and applicants can receive up to $5 million per location and up to $10 million total. The grants can cover a wide array of costs, such as payroll, utilities, maintenance, and supplies.
A total of $5 billion in funding is set aside for businesses that earned less than $500,000 in revenues in 2019. The bill also establishes a 21-day priority period designed to serve businesses owned by women or veterans as well as socially and economically disadvantaged small businesses.
EIDL grants
The U.S. Small Business Administration’s Targeted Economic Injury Disaster Loan Advance program received another $15 billion in funds. The program previously received a $20 billion injection under December’s Economic Aid Act and was extended through the end of this year.
This program provides grants of up to $10,000 for businesses in low-income communities with 300 or fewer employees that have suffered revenue losses of at least 30 percent in any eight-week period between March 2, 2020 and Dec. 31, 2021.
PPP boost
The Paycheck Protection Program will receive an additional $7.25 billion in funding, which will be added to the $284.5 billion approved for a new round of funding under the Economic Aid Act. The bill also opens the program to larger nonprofits and digital news companies.
The legislation does not modify the March 31 deadline for the current round of PPP, but members of the House Small Business Committee recently suggested they would be open to extending this deadline to help accommodate lenders and allow more businesses to apply for forgivable loans.
Shuttered venues
The bill adds another $1.25 billion to the Shuttered Venue Operators Grant program, including $500,000 allocated for technical assistance. This program, established under the Economic Aid Act with $15 billion in funding, offers grants to arts and cultural institutions such as live music venues, performing arts organizations, movie theaters, and museums. The SBA has not yet established eligibility requirements for the program.
The legislation also eases restrictions on the program, which was previously barred to any entities that received a PPP loan. Some potential applicants have opted to pursue the loans instead of waiting for the grant program to be established due to ongoing economic uncertainties. Under the amended language, businesses can still receive a grant but the sum will be reduced by an amount equal to the total amount of PPP loans received after Dec. 27, 2020.
Other support
Other support for small businesses and employers includes:
- $10 billion allocated to states to support small businesses with low-interest loans and other assistance through the State Small Business Credit Initiative
- An extension of the Employee Retention Credit through the end of the year, allowing businesses to claim a refundable credit of up to $7,000 per employee per quarter during the last half of the year
- $1.3 billion for the SBA’s budget to assist with the implementation of various relief programs
- $175 million for a Community Navigator program providing outreach, education, and technical assistance to small businesses regarding COVID-19 relief measures