NEW STIMULUS PACKAGE UPDATES - March 25, 2021
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.
Restaurant and Bar Relief
- 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. However, the application period is still set to end on 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 program will be open April 8. Set up a reminder for when the program opens here.
- Before it opens, create a free SAM.gov account.
Learn more about SVOG here.
- The new stimulus package provides $15 billion to the targeted Economic Injury Disaster Loan (EIDL) advance, 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.