Updated 4/19/2021: This article will continue to be updated as more information is released.
Congress recently approved, and the President has signed, the “American Rescue Plan Act,” a new $1.9 trillion stimulus package. The new package provides direct funding to restaurants and bars, changes to PPP, EIDL and Shuttered Venue Operators Grant (SVOG), jobless benefits and expands three tax credits.
Looking for a complete summary of all the funding provided by the package? View a comprehensive guide here.
- SBA recently announced the official program guidelines for this fund. Although applications are not yet being accepted, applicants can prepare by having their tax returns ready. Registration with SAM.gov and a DUNS identifier is not required. The official application launch date is said to be announced shortly. Ahead of the launch, the SBA will establish a seven-day pilot period where applicants will be randomly selected from existing PPP borrowers. Learn more here.
- Under the new package, $28 billion will be awarded through grants to restaurants and bars that lost revenue due to the pandemic.
- Individual restaurant owners can apply to grants for a maximum of $5 million, and restaurant groups with multiple locations can apply for grants for a maximum of $10 million.
- The first three weeks of the grant period will prioritize restaurants owned by women, people of color and veterans. Furthermore, $5 billion has been set aside to directly help smaller restaurants with revenues of less than $500,000 in 2019.
- Eligibility will be determined by subtracting applicants’ 2020 sales from 2019 revenues. This will compensate restaurant owners for revenues lost on behalf of COVID-19 restrictions. If a restaurant was not open in 2019, costs incurred minus gross receipts received will be used to determine eligibility.
- Businesses eligible for direct payments include any restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, or facility where customers may be served a food or drink.
- Grant funds can be used to cover expenses such as payroll, mortgage, rent, utilities, maintenance expenses, PPE and cleaning supplies, food costs, operational expenses and more. The funds can be used for expenses incurred from February 15, 2020, to December 31, 2021.
- Under the new stimulus package, the Paycheck Protection Program (PPP), an SBA-backed loan, will be expanded to provide loans for more non-profit entities. The new act will make PPP loans available to any 501(c) organization that is exempt from taxation under section 501(a).
- It will also award an additional $7.25 billion in additional funding to the program.
- The deadline for the PPP loan has now been extended until May 31, 2021.
Learn more about PPP and how to apply here.
- $1.25 billion has been provided to the Shuttered Venue Operators Grant (SVOG) program, a program providing emergency assistance to venues affected by COVID-19. In addition, an amendment will allow businesses to apply to both the SVOG and PPP, which was previously barred.
- SBA just announced that the portal for SVOG is currently down and will be open shortly.
- Before it opens, create a free SAM.gov account.
Learn more about SVOG here.
- NEW: Recently, SBA announced that it is increasing the maximum amount small businesses and non-profit organizations can borrow through the COVID-19 Economic Injury Disaster Loan Program.
- Starting April 6, the loan limit will be from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.
- Businesses that receive a loan subject to the current limits do not need to submit a request for an increase. SBA said it will reach out directly via email to provide more details on how businesses can request an increase closer to the April 6 implementation. Any new loan applications, and any loans in process, will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.
- On March 12, SBA also announced the agency would extend deferment periods for all disaster loans including COVID-19 EIDLs until 2022. SBA will extend the first payment due date for disaster loans in 2020 to 24-months from the date of the note and 18-months from the date of the note for all loans in 2021.
- The new stimulus package provides $15 billion to the Targeted Economic Injury Disaster Loan (EIDL) Advance Program, which offers $10,000 grants to be awarded to certain businesses and nonprofit organizations which previously applied for the original EIDL Advance Program but did not receive the full $10,000 award amount.
- To qualify for this new program, businesses must be located in a low-income community, have suffered a loss of more than 30% and have 300 employees or less.
- Priority will be to businesses and nonprofits which received a previous EIDL advance in less than $10,000, and second priority will be to businesses and nonprofits which applied for assistance before December 27, 2020 but were not awarded funds.
Learn more about EIDL here.
For more information on the stimulus package, visit the SBA’s summary here.
For information on the last stimulus package, visit our blog post here.