What’s in the $1.9 Trillion Bailout for You

Update: President Biden signed into law the American Rescue Plan Act of 2021 on the afternoon of March 11.

After a marathon voting session over the weekend, the Senate passed a massive $1.9 trillion stimulus package–nicknamed the US Bailout Act. The legislation means an additional $50 billion in aid for small businesses through the Paycheck Protection Program, as well as subsidies for bars and restaurants and closed places. No Republicans voted to approve the measure.

The Senate bill, which awaits final approval from the House and President Joe Biden, does not strengthen the federal minimum wage, which now stands at $7.25 an hour and has not been lifted since 2009. The House voted in late February to raise the minimum rate to $15 an hour by 2025. It n It’s unclear whether some House Democrats will challenge the bill in the absence of the minimum wage provision. , or agree to go ahead and raise the issue later. Lawmakers generally want to pass legislation by March 14 — the date when enhanced federal unemployment benefits are due to expire.

Anyway, here’s what’s currently planned for small businesses:

$7.25 billion for PPP: More money; but no more time. The forgivable loan program for small businesses has not been extended beyond its current end date of March 31 despite widespread calls from the business community for more time. A business coalition led by the United States Chamber of Commerce sent a letter to lawmakers this week, urging them to extend the PPP until the end of the year. The Senate bill adds $7.25 billion to the program, which restarted in mid-January with $284.5 billion. Some larger nonprofits will also become eligible.

$15 billion for Advance Economic Disaster Loan Grants (EIDL): Small businesses in low-income communities that have been hardest hit by the pandemic will be eligible to receive up to $10,000 each. The program is designed to run in a series of exclusive windows, starting with companies that did not receive the full amount they originally requested, i.e. $1,000 per employee, up to at $10,000. Eligible businesses must not have more than 300 employees and must have suffered a loss of gross revenue of more than 30% during an eight-week period between March 2, 2020 and December 31, 2021, compared to a period of eight weeks before March 2. .

The second window is for those who have suffered 50% losses and have less than 10 employees. The third is for those who have suffered losses between 30 and 50% and who have less than 10 employees. The Small Business Administration (SBA) is to provide $5,000 grants to each qualifying business, until funds are exhausted.

This program, which has been extended until 2021, had been refinanced to the tune of 20 billion dollars during the last recovery plan. The grants of up to $10,000 were offered to business owners under duress at the start of the pandemic. But to keep the funds, the SBA had to cut the advance to $1,000 per employee before cutting the subsidies altogether last July. The second relief package, passed in December, also prevented grant recipients from having their rebate calculation reduced by the amount of the grant. So if you had a PPP loan of $100,000 and an EIDL advance grant of $10,000, your loan forgiveness would no longer be reduced by $10,000 as it would be under the Cares Act.

Extends Employee Retention Credit: The ERC is extended until the end of the year. Under the new bill, businesses can claim the refundable credit of up to $7,000 per employee per quarter in the last half of the year. So, including the existing provision, which is split evenly, employers would be entitled this year to a maximum of $28,000 per employee – and if they applied for 2020, the total amount available is $33,000 per employee. employee.

Eligible employers in 2021 include companies that have experienced a full or partial suspension of operations following government mandates, or those that can show a reduction of at least 20% in quarterly gross revenue, compared to the same quarter in 2019. Vote 2020 must show a drop of more than 50% in gross receipts. Beneficiaries cannot benefit from a tax deduction on expenses paid with PPP funds, in line with the current law.

$28.6 billion in grants for restaurant businesses: Grants available to bars, restaurants and caterers would be equal to the difference between a business’ pre-pandemic gross receipts, i.e. in 2019, and last year’s gross receipts. If the business has fewer than 20 locations, it can get a grant of up to $5 million per location, up to $10 million in total.

$1.25 billion for closed site operators: Grants are available for cinemas, museums, performance halls and other institutions whose primary business activity is live events. The grants are equal to the lesser of 45% of the site’s gross revenue in 2019 or $10 million. It should be noted, however, that the SBA has not yet enacted the current grant program for performance halls, which was adopted as part of the latest relief package. It’s worth $15 billion, once it goes live.

$100 million for a “community navigator” program: Community-based organizations or community-based financial institutions can obtain funds to provide outreach, education and technical assistance services to help eligible small businesses become aware of and participate in Covid-19 relief programs. It prioritizes improving access for businesses owned by socially and economically disadvantaged people, women and veterans.

Darcy J. Skinner