The $1.9 trillion relief package signed by President Biden March 11 includes several provisions to help small businesses outlast the prolonged economic downturn.
The American Rescue Plan Act, which gained key Senate approval after tweaking unemployment benefits and removing the contested federal minimum wage hike, kick starts another round of government aid a full year into the pandemic and secures Joe Biden's first major legislative victory as president.
Business management consultant Marco Robert welcomes the support as many of his customers have struggled to survive and cover expenses amid the pandemic.
“Many small businesses had to fold up due to taxes, others couldn't foot the bills due to the lockdown and even when they tried online, they lost customers," says the founder of Tumiza Strategy Consulting LLC in San Mateo, Calif.
The Silicon Valley consultancy in December received $2,500 from the Paycheck Protection Program, which helped offset payroll costs for his staff of more than 25.
What's in the Bill?
The massive bill extends several benefits for small businesses, including PPP and Economic Injury Disaster Loans (EIDL), as well as offering new assistance for the hospitality sector and other hard-hit industries.
The bill allocates:
- $15 billion for EIDL Advanced Grants for businesses with less than 300 employees located in low-income communities. Recipients must prove a 30% revenue reduction over an eight-week period.
- $15 billion in grants for the airline industry and contractors, and $8 billion for airports. The key economic sector furloughed more than 32,000 employees in the fall. The nation's largest airliners warned of another 27,000 furloughs if more government aid wasn't received.
- An additional $7.2 billion in PPP loans. The Small Business Administration has dispersed nearly $680 billion of the $796 billion earmarked through three funding rounds.
- $28.6 billion for restaurants, bars, and other food and beverage providers.
- $1.2 billion for shuttered venues.
- $175 million for a pilot program to boost participation in COVID-19 relief programs for businesses lacking resources, prioritizing those owned by socially and economically disadvantaged proprietors, women, and veterans.
More help can't come soon enough for Antonio Wells, who received a $4,000 EIDL loan and $2,000 grant in June for his Chicago marketing agency, but still is awaiting PPP funding approval.
Like most proprietors in the city's Pilsen neighborhood on the lower west side, business halted immediately at the onset of the pandemic. Contracts were canceled, prompting him to find a new base of customers.
“Smaller businesses still are not receiving the funding they need to sustain their businesses even with the priority period President Biden placed on PPP loans," says the owner of NAMYNOT Inc.
Wells faced several onerous roadblocks to secure funding and grants for his business, including providing financial proof of revenue dips, filing tax transcripts, poor government communication, and the SBA's ill-defined mapping of low-income neighborhoods.
“Small businesses need better, more streamlined funding to stay afloat and succeed from this pandemic," Wells asserts.
The $25 billion Restaurant Restoration Fund is a life preserver for the hospitality industry, which has accounted for nearly 40% of the 10 million U.S. jobs lost during the pandemic. It expands eligibility to nearly any food and beverage provider, including brewpubs, tasting and taprooms, caterers, inns, lounges, nightclubs, and food trucks, carts, and stands. Grants are available to completely offset pandemic-led income losses up to $10 million per entity, or $5 million per location.
Funding can cover payroll, mortgage or rent, utilities, maintenance, paid sick leave, and supplies, as well as food, beverage, and other essential operational expenses.
The bill also extends the employee retention credit until year's end, allowing qualified businesses to claim as much as $7,000 in tax credits per employee, per quarter for the last half of the year.
New York City attorney and government relations expert Arthur Goldstein applauds the bold, wide-ranging relief plan crafted by the Biden administration in its first significant agenda-setting proposal, which is set for signature Friday.
“Let's be blunt here, the previous administration failed on delivering the relief needed for states and local governments," says Goldstein, a partner at Davidoff Hutcher & Citron LLP, which operates five offices across New York, Washington D.C. and West Palm Beach, Fla. “With funding for state and local governments, money for vaccine distribution, schools, transportation, small businesses, and individuals, President Biden's American Rescue Plan is the comprehensive stimulus package required for this country to recover and is needed now more than ever."