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Millions of small businesses could be eligible for new or beefed-up grant programs if some of the provisions in the House-passed Covid-19 relief bill become law.
The grants, part of the American Rescue Plan Act of 2021 passed by the House on Saturday, would still need to be considered in the Senate version of the legislation and passed by Congress before heading to President Joe Biden for his signature. And parts of the legislation might already be in jeopardy, with Democrats dealing with a setback on a $15-per-hour minimum wage that will likely prevent its inclusion in the Senate version.
The legislation so far provides tens of billions of dollars in grant programs for small businesses, including an additional $15 billion for the Small Business Administration’s Targeted Economic Injury Disaster Loan Advance program. The program was originally born out of the Economic Injury Disaster Loan Advance program started last March, in which small businesses could apply for a disaster loan and receive a cash grant of $10,000 regardless of whether they were ultimately approved for a loan.
Scores of small businesses said they were shortchanged, receiving just $1,000 per employee instead of the full cash grant, while many more received nothing at all. Congress approved in December another $20 billion to fund that program, but demand might still outstrip supply. SBA received about 10.1 million applications for the original EIDL advances last year. The agency approved about 5.8 million of them, valued at a total of $20 billion, or an average of $3,500 per advance, according to a September report by the Government Accountability Office.
The agency only recently began reaching out to small businesses that did not get initial grants to apply for the new program, but there were stipulations, including having seen at least a 30% reduction in revenue and having fewer than 300 employees, among other guidance. The new legislation would direct the SBA to make additional supplemental grants to small businesses that have seen a revenue loss of at least 50% and are located in a low-income census tract and have 10 or fewer employees.
The legislation also includes $25 billion for an entirely new grant program at the SBA, this one directed at restaurants. About $5 billion would be set aside for businesses with less than $500,000 in 2019 revenue, and grants overall would be limited to $10 million per entity, with a limitation of $5 million per physical location, and businesses would be limited to 20 locations.
The grants would be based on subtracting 2020 revenue from 2019 revenue, and priority would be given to restaurants owned by women, veterans and socially and economically disadvantaged owners. The grants could be used for payroll, mortgage, rent, utilities, supplies, food and beverage expenses and operational expenses, among other items.
The new restaurant grant program is similar to a previously authorized grant program for shuttered venues, which would get an additional $1.5 billion under the new legislation.
But the SBA has yet to set a date for the shuttered venue program, which is a big problem for small businesses considering it, because the venues cannot apply for both that program and the Paycheck Protection Program. The PPP reopened Jan. 19 for all small businesses and expires on March 31.
Meanwhile the Biden administration’s decision in February to tweak the PPP could mean more money for some small businesses and gig workers. And the December legislation that authorized the second round of PPP loans for 2021 also included tax relief as well as simplified PPP loan forgiveness applications for loans of $150,000 or less. The program also now covers personal protective equipment and other Covid-19 expenses, which allows small businesses to receive full forgiveness for any spending related to those measures.
Source: https://www.masslive.com/business/2021/03/american-rescue-plan-act-of-2021-offers-billions-more-in-small-business-grants.html