The American Rescue Plan hopes to bring more resources to small businesses with new and expanded grant programs. The Senate approved President Biden’s $1.9-trillion coronavirus relief plan Saturday, creating additional aid for American small businesses. The bill is now up for a revote by the House of Representatives with the updated revisions from Congress before it goes to President Biden’s desk for his signature.
This highly anticipated legislation would be a great relief to countless small-business owners who continue to be impacted by the Covid-19 pandemic. Here are six key financial resources for small businesses in the American Rescue Plan of 2021.
- More funding for the Economic Injury Disaster Loan Program. This legislation would bring 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 created out of the original Economic Injury Disaster Loan Advance program that started last March. This program allows small businesses to apply for a disaster loan and receive a cash grant of $10,000 regardless of whether they were approved for a loan.
- The Paycheck Protection Program will get a boost in funding. The legislation would add $7.25 billion in funds for Paycheck Protection Program loans. The program offers forgivable loans for small-business owners; however, the program appears to not be extended past its current end date of March 31. Many members of the business community are asking for more time and urging to extend the program through the end of the year. The new funding adds to the $284.5 billion allocated for the program that started again in mid-January. Additional nonprofit organizations will also become eligible.
- Restaurants and food establishments will see additional resources to recover. The legislation would add approximately $28.6 billion in aid to restaurants and other food and drink establishments. Grants will be made available to bars, restaurants and caterers and would be equal to the difference between a business’s gross receipts in 2019 and gross receipts last year. Businesses with fewer than 20 locations can get a grant of up to $5 million per location, up to $10 million in total.
- The Employee Retention Credit will be extended. The Employee Retention Credit, which was created under the CARES Act, will be extended until the end of the year. The new legislation will allow businesses to claim the refundable credit equal to as much as $7,000 per employee per quarter during the last half of the year.
- Additional stimulus payments for American families: The legislation would bring a new round of financial assistance to Americans who are still coping with the impact of the pandemic. This would include $1,400 in direct payments, an extension of supplemental unemployment benefits and an increase to the child tax credit. Individuals earning up to $75,000 and couples earning up to $150,000 would receive the full direct payments of $1,400 per person. However, those payments would phase out for individuals and couples who make more than $80,000 and $160,000 a year, respectively.
- Expanded unemployment benefits: Federal unemployment benefits would be extended through September 6 and will provide $300 in weekly payments. The first $10,200 of those benefits would be tax-free for households that earn $150,000 or less.
The House is expected to take up the Senate version of the bill next week before it is sent to President Biden for his signature.
EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.
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