What’s Within the $1.9 Trillion Rescue Plan for You
After a marathon voting round over the weekend, the Senate passed a massive $ 1.9 trillion stimulus package known as the American Rescue Plan Act. Legislation provides an additional $ 50 billion for small businesses under the paycheck protection program, as well as grants for bars and restaurants and gated venues. No Republicans approved the measure.
The Senate bill, pending final approval by the House and President Joe Biden, does not increase the federal minimum wage, which is now at $ 7.25 an hour and hasn’t been repealed since 2009. The House voted to raise the minimum wage in late February It is unclear whether some House Democrats will challenge the bill without the minimum wage or agree to move on and bring up the issue later. Legislators generally want the legislation to pass by March 14 – the date that federal improved unemployment benefits will expire.
In both cases, the following is currently planned for small businesses:
$ 7.25 billion for the PPP: More money; but no more time. The Small Business Forgivable Loan Program has not been extended beyond its current end date of March 31, despite widespread calls from the business community for more time. A coalition of companies led by the U.S. Chamber of Commerce sent a letter to lawmakers this week asking them to extend the PPP until the end of the year. The Senate bill adds $ 7.25 billion to the program, which started again at $ 284.5 billion in mid-January. Some larger nonprofits will also be eligible.
$ 15 billion in Economic Injury Disaster Loan (EIDL) advances: Small businesses in low-income communities hardest hit by the pandemic are eligible for up to $ 10,000 each. The program is slated to roll out in a series of exclusive windows starting with companies that haven’t received the full amount they originally requested – i.e. $ 1,000 per employee, up to $ 10,000. Eligible Companies must not have more than 300 employees and have suffered a gross income loss of more than 30 percent in the eight week period between March 2, 2020 and December 31, 2021, compared to an eight week period prior to March 2 .
The second window is for those who have suffered 50 percent losses and have fewer than 10 employees. The third is for those who have had losses between 30 and 50 percent and have fewer than 10 employees. The Small Business Administration (SBA) must grant grants of $ 5,000 to each eligible company while the funds are available.
This program, which was extended to 2021, was refinanced with USD 20 billion in the last economic stimulus package. The grants of up to $ 10,000 were forcibly offered to business owners at the start of the pandemic. However, to save funds, the SBA had to reduce the advance to $ 1,000 per employee before the grants were completely suspended last July. The second aid package, which was passed in December, also protected grant recipients from reducing their award calculation by the amount of the grant. So if you had a $ 100,000 PPP loan and an EIDL advance of $ 10,000, your lending would no longer decrease by $ 10,000 as it would under the Cares Act.
Extends the employee loyalty credit: The ERC will be extended until the end of the year. The new bill allows companies to claim the refundable credit of up to $ 7,000 per employee per quarter over the last six months. Including the existing provision, which is similarly split, employers would qualify for up to $ 28,000 per employee this year – and if they apply for 2020 the total available is $ 33,000 per employee.
Eligible employers in 2021 include companies that have ceased operations in full or in part due to government mandates, or where gross quarterly income has decreased by at least 20 percent compared to the same quarter of the previous year.The loan for 2020 must show a decrease in gross income by have more than 50 percent. Recipients cannot withhold tax on expenses paid with PPP funds, which is a continuation of applicable law.
$ 28.6 billion in grants to food businesses: The grants for bars, restaurants and caterers would be the difference between a company’s gross earnings before the pandemic – i.e. 2019 – and last year’s gross earnings. If the company has fewer than 20 locations, it can receive a grant of up to $ 5 million per location, up to a total of $ 10 million.
$ 1.25 billion for gated venue operators: The grants are available to cinemas, museums, venues and other institutions whose main business is live events. The grants represent less than 45 percent of the venue’s gross revenue in 2019, or $ 10 million. It is noteworthy, however, that the SBA has not yet adopted the existing live venues grant program that was approved as part of the last aid package. That’s worth $ 15 billion once it actually goes live.
$ 175 million for a Community Navigator program: Community organizations or community financial institutions may receive funding to provide public relations, education, and technical assistance to enable eligible small businesses to become aware of and participate in Covid-19 relief programs. It prioritizes improving access between businesses owned by socially and economically disadvantaged individuals, women and veterans.