After weeks of debate, consternation and bipartisan compromise, the latest COVID-19 relief plan has finally passed through both chambers of Congress and is now on track to finally reach President Biden’s desk in the coming days. The $1.9 trillion package has been months in the making, and many small businesses who have sought funding from Credibly and other small business lenders are gradually running out of capital to weather what remains of the global health crisis.
The new package, titled the American Rescue Plan Act of 2021, is coming just as the benefits of the previous package, passed late in December of last year, are set to expire. In that time, small business owners have eagerly awaited the new stimulus package, with an MSNBC survey revealing that 63% of business owners approve of the measures in the bill as their confidence for what the future may hold continues to diminish.
In addition to stimulus checks that will be given to Americans making less than $80,000 annually, $160,000 for couples, as well as a $300 boost in unemployment benefits through early September, the revised bill includes several programs aimed specifically at helping struggling small businesses rebound from a year of shutdowns and other privations imposed as a result of the COVID-19 pandemic.
$22B In PPP And Emergency Loans
Among the aspects of this latest package to return from previous stimulus bills is renewed funding for forgivable loan programs, including $15 billion in targeted Emergency Injury Disaster Loans (EIDL) and $7 billion for the Paycheck Protection Program.
EIDL eligibility remains unchanged from previous iterations. The new funds allow for businesses with fewer than 300 employees that have lost 30% or more of their revenue between March 2, 2020, and December 31, 2021, to apply for a loan of $1,000 per employee up to $10,000. Additionally, the Small Business Administration is also empowered to provide an additional $5,000 to businesses with fewer than 10 employees that have lost between 30% to 50% of their revenue in that same period.
Also receiving additional funding is the PPP, which has already supplied more than $662 billion to small businesses over the past 12 months and still has $284 billion of available funds. The American Rescue Plan Act adds an additional $7.25 billion to that but retains the application deadline of March 31, 2021.
Additionally, PPP eligibility has been modified, first to include online businesses with at least one physical location and fewer than 500 employees as well as larger not-for-profit entities, 501(c)(3) with fewer than 500 employees and 501(c)(6) with fewer than 300. The bill also narrows eligibility for larger companies, primarily by targeting lobbying activities in excess of $1 million or 15% of a companies activities.
$26B For Restaurants and Venues
Among the newer measures of the American Rescue Plan Act are several programs aimed specifically at those businesses most impacted by the pandemic, namely restaurants, bars and entertainment venues.
The largest of these is a $25 billion grant program designed specifically for restaurant owners. Eligible restaurants with 20 locations or fewer will be eligible for grants equal to the difference between their 2019 and 2020 revenues, up to $10 million per company and $5 million per physical location. Like the PPP loans, funds can be spent on payroll, property or supplies as well as benefits programs up to $100,000 per year.
And, while not new, the Shuttered Venues Operators program will receive an additional 1.25 billion. Venues who apply will be eligible for up to 45% of their gross earned revenue up to a maximum of $10 million.
Importantly, applicants to the Shuttered Venues Operators program cannot have received PPP loans after 2020 and must primarily be a liver performance venue Additionally, restaurants that apply for relief through the Restaurants Act and have received PPP loans may have that amount subtracted from the eligible grant total.
$175M For A Community Navigator Program
Finally, the package also earmarks $175 million for a pilot program that is aimed at increasing awareness and participation in COVID-19 relief programs, specifically for underfunded or disadvantaged communities that may not have access to the information or resources needed to successfully apply and utilize stimulus funds.
For as many businesses that have been able to take advantage of the relief measures so far enacted, hundreds more may still be struggling, unaware of the myriad economic relief they both need and deserve to continue to serve their communities.
And for those small business owners who may still be struggling, Credibly remains dedicated to working directly with enterprises of all shapes and sizes to provide fast, straightforward financing for whatever your business needs might be.
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