Small Business Relief

The American Rescue Plan expands assistance and provides additional relief to small businesses and their employees struggling as a result of the COVID-19 pandemic. Here's what you need to know:

SBA Paycheck Protection Program

The Paycheck Protection Program provides small businesses with zero-fee loans of up to $10 million to cover payroll and other operating expenses. They can seek forgiveness for PPP funds spent on eligible payroll and overhead costs, such as rent, mortgage interest payments, and utility costs. Small businesses must spend at least 60 percent of the funds on payroll costs and no more than 40 percent on eligible overhead costs.

The American Rescue Plan provides $7.25 billion nationwide for additional first- and second-round Paycheck Protection Program (PPP) loans to small businesses and nonprofits until the program expires on March 31, 2021. 

The December COVID relief law enabled businesses that have already received a PPP loan to apply for a second forgivable loan of up to $2 million, and opened new categories of expenses to forgiveness. The American Rescue Plan also expands eligibility to additional categories of nonprofits and internet-only publishers, and changes rules about how PPP loans interact with Shuttered Venue Operators grants. 

Please visit the Small Business Administration website for more information and resources.

SBA Economic Injury Disaster Loan (EIDL) Emergency Advance Grants

The American Rescue Plan provides an additional $15 billion nationwide of targeted funding for hard-hit, underserved small businesses with increased flexible grant relief. These grants will be particularly helpful for very small businesses and sole proprietors, which include over 90 percent of minority-owned businesses that have been disproportionately devastated by this crisis.

Congress expanded eligibility for SBA economic injury disaster loans (EIDLs) and established an EIDL emergency grant program, which allows loan applicants to request an advance of up to $10,000 to keep employees on payroll, pay for sick leave, or otherwise pay business obligations. EIDLs are loans up to $2 million with interest rates of 3.75% for businesses and 2.75% for nonprofits.

The December COVID relief law allocated an additional $20 billion of targeted funding for the emergency advance grants. However, the law also restricts eligibility to qualified applicants located in low-income communities

The American Rescue Plan also sets aside $5 billion for a new round of $5,000 grants to the smallest and most severely impacted small businesses. Any business that suffered losses of greater than 50 percent and is located in a low-income census tract is eligible for a $5,000 supplemental grant from SBA. This grant may be in addition to any EIDL Advance or EIDL targeted grant that entity has received.

For more information on EIDL emergency advances and to see whether your business is eligible to apply, please click the link.

SBA Live Venue Grants Program

The American Rescue Plan provides an additional $1.25 billion nationwide for the SBA's Shuttered Venue Operators (SVO) grants, a new program created in the December COVID relief law. The SBA is still working to operationalize the program and open it for applications. The American Rescue Plan also allows eligible entities to access both SVO grants and PPP loans, which was previously prohibited by the December COVID relief law. 

The December COVID relief law provided $15 billion nationwide to a new SBA grant program for live venues impacted by the public health crisis. Eligible grant recipients include live venue operators, promoters or theatrical producers, independent movie theatre operators, museum operators, and talent representatives. Of the total amount, $2 billion is set aside for eligible entities that employ fewer than 50 full-time employees. Grants are awarded by the SBA.

For more information on the Shuttered Venue Operators Grant and to see whether your business is eligible to apply please click here.

SBA Restaurant Grant Program

The American Rescue Plan provides $28.6 billion nationwide for a new SBA grant program specifically for restaurants and other food and drinking establishments impacted by the pandemic.

The grants of up to $10 million per business ($5 million per physical location) can be used for a wide variety of expenses, including but not limited to payroll costs, rent, utilities, supplies, and operational expenses.

Eligible entities include restaurants, food stands and food trucks, caterers, bars and lounges, brewpubs and tasting rooms, inns, taverns, and similar businesses, including those located in airport terminals. 

Employee Retention Tax Credit

The American Rescue Plan extends and expands the Employee Retention Tax Credit (ERTC) through December 31, 2021. The ERTC, originally enacted in the CARES Act, helps struggling businesses and nonprofits retain and rehire workers by creating a refundable payroll tax credit. The bill expands the ERTC to allow certain severely distressed businesses to claim the credit for a greater share of employee wages. It also expands the credit to cover newly formed businesses, to help spur hiring and recovery.

Please check the IRS’s website for more information as it becomes available: https://www.irs.gov/coronavirus/coronavirus-tax-relief-for-businesses-and-tax-exempt-entities

Debt Relief for New and Existing SBA Borrowers

In the COVID relief law, Congress resumed the payment of principal and interest on small business loans guaranteed by the SBA. For small businesses that already have an SBA loan (such as a 7(a), 504, or microloan) or took one out within 6 months after the CARES Act was enacted, the SBA will pay all loan costs for borrowers, including principal, interest, and fees, for six-months.  SBA borrowers may also seek an extension of the duration of their loan and delay certain reporting requirements. 

Please visit the Small Business Administration website for more information and resources.

More Information

For more information about SBA loan programs, please visit the Small Business Administration website. More information about small business programs in the CARES Act and other resources for small businesses can be found on the U.S. Senate Committee on Small Business and Entrepreneurship website.