2020 was a challenging year for many, and economic recoveries in 2021 have been slow in many places. Small businesses and individuals have suffered many hardships since lockdowns began. Now one year later, relief is on the horizon.
The $1.9 trillion COVID-19 relief bill that was recently passed is good news to many Americans impacted by the pandemic. Small business owners should be happy, too – the relief bill includes measures to help small businesses affected by COVID-19 shutdowns.
Read on to learn more about the considerations for small businesses included in the relief act, and then reach out to the experts at FinTap to learn more.
COVID-19 Relief Bill Considerations for Small Businesses
On March 11, President Joe Biden signed into law the new COVID-19 stimulus bill, called the American Rescue Plan Act of 2021, to help American citizens and businesses recover from economic hardships suffered during and due to the pandemic.
The Act includes a number of helpful provisions designed to directly benefit and support small businesses.
Paycheck Protection Program
The Act added $7.25 billion to the Paycheck Protection Program. These funds will, in part, expand the program to additional industries, such as digital news and more nonprofit organizations. The Paycheck Protection Program was designed to help small businesses keep their employees paid through access to loans – currently, the loans are available through May 31, 2021, through the SBA.
The American Rescue Plan Act directs additional funds to the program so it can reach more small businesses. Keeping Americans employed and receiving a paycheck is critical to economic recovery. Paycheck Protection Program loans can be used to pay employees or their benefits and help indirectly fund costs like mortgages, utilities, and inventory to keep the business running and employees paid. If a small business meets all the requirements of the loan and employees are retained, the loan will be forgiven.
If your business has not received a loan through the Paycheck Protection Program to date, you may be eligible for a First Draw PPP Loan. If you have already received funds through this program, some businesses are eligible for a Second Draw PPP Loan. Second Draw loans are available to small businesses that have complied with the use requirements of their first loan and can also prove at least a 25% reduction in revenue from 2019 to 2020.
Restaurant Revitalization Fund
The Act provides targeted help for the restaurant industry through $28.6 billion in grants to support the Restaurant Revitalization Fund. The pandemic-related shutdowns and travel restrictions hardest hit bars, restaurants, and others in the hospitality industry. Targeted measures aimed to support the industry make sense.
Shuttered Venue Operators Grant Program
More funds were directed to the Shuttered Venue Operators Grant (SVOG), and eligibility for the grant was extended, allowing small businesses to apply for both this grant and a loan through the Paycheck Protection Program. Through the SVOG, venues that closed or were otherwise affected by COVID-19 can seek relief of some of their lost revenue.
Community Navigator Pilot Program
$100 million was set aside to establish a Community Navigator Pilot Program designed to provide grants to community programs that improve access to COVID-19 education and other resources. Programs have to show they qualify to apply for pilot program funds.
Targeted Economic Injury Disaster Loan Advance Payments
Economic Injury Disaster Loans are available to small businesses that have suffered economic losses due to COVID-19. The Act expanded these loans to agricultural businesses. New maximum loan amounts of $500,000 were also announced.
Businesses that previously took EIDLs of less than the new maximum may not be eligible for additional funds up to the $500,000 cap. The SBA is contacting borrowers that are in this category – you can also reach out to them to see if you may qualify for additional funds. The SBA notes borrowers have two years to request additional funds if they originally accepted less than what was offered.
Targeted EIDL advances were extended through the Act. Advances of up to $10,000 are available to applicants that are located in low-income communities. If you already received this advance, you are not eligible again, but if you were denied due to lack of available funding, you might now be eligible. As well, applicants who received less than the full $10,000 previously may now be eligible for the remaining funds up to $10,000.
How to Apply for COVID-19 Relief Funding
In order to take advantage of the considerations for small businesses included in the American Rescue Plan Act, first, you have to understand which programs are designed for your needs and type of business. Once you have done your research, you can decide which program or programs make sense for you to apply for.
Advisors can help you review your financial situation and decide how to best proceed. Once you have made your decisions, applying for various loans and grants is easy. Knowing the ins and outs of small businesses is our business, so we can help even if your credit is not perfect. Especially after the last year, we understand how hard it can be for small businesses to secure financing – reach out to FinTap for hassle-free help with funding.
Merchant Cash Advance
Another funding option that might be right for your small business is a Merchant Cash Advance. An MCA is a flexible option to give your business the funding it needs with flexible terms. An MCA acts as a cash advance based on the predicted future credit card sales of your company. For example, if your company has little credit history but high growth and future sales revenue, an MCA may be the best way to secure funding when traditional loans are not available.
Even with the relief measures introduced by the American Rescue Plan Act, some small businesses will not qualify for loans or grants due to their industry, revenue history, or size. This is where MCAs play an essential role as alternative funding. Learn more about how an MCA could help your business recover – it is fast and easy to apply.
An MCA is a type of revenue-based financing that is gaining popularity because of its flexibility. It fills a gap left by traditional funding products and can make it accessible for a small business to secure larger amounts of funding than other products may allow.
COVID-19 has challenged all of us and changed the way we live, work, recreate, and do business. As a small business owner, you have had to be flexible and change your business model and operations. It has not been easy, and now there is more support and help than ever through the American Rescue Plan Act.
Be sure you understand and apply for the resources you are eligible for – the funds are available for small businesses now. Take advantage of the help and resources to get your business back in shape and better than before the pandemic. It can be challenging navigating all the sites to know what your business is eligible for, so talk to the experts as part of your research to be sure you maximize the benefits from the COVID-19 relief act.
How do I Learn More?
To learn more about small business considerations of the COVID-19 relief bill, contact the experts at FinTap. Our licensed experts will be happy to answer any questions you have.