By Catherine Lyons
Last week President Biden signed into law the $1.9 trillion American Rescue Plan Act of 2021. The legislation includes several provisions to provide continued or additional assistance to small businesses. The American Rescue Plan Act expands the eligibility and budget of the Paycheck Protection Program (PPP), allocates additional funds to the Targeted Economic Injury Disaster Loan (EIDL) program, establishes a new relief fund for restaurants, and modifies the Shuttered Venue Operators (SVO) grant program.
Notably, the law also reauthorizes the State Small Business Credit Initiative (SSBCI) that will allow states flexible financing as well as the opportunity to leverage private capital to support entrepreneurs and small businesses. EIG applauds the inclusion of SSBCI in the legislation, which appropriates $10 billion to the program. Policies like SSBCI recognize the importance of economic dynamism in lifting struggling communities, and activate the power of private funding in regions underserved by venture capital, incubate entrepreneurial ecosystems by supporting small businesses, and promote an equitable, place-conscious economic recovery from the pandemic recession.
In addition to reauthorizing SSBCI, the legislation does the following for small businesses:
- Greatly expands nonprofit eligibility for PPP to all 501(c)(3)s with 300 employees or less that do not receive 15 percent or more of their revenues or spend 15 percent of their time on lobbying activities, or spent $1 million or more on lobbying during the most recent tax year.
- Makes internet-only news organizations with 500 employees or less per physical location eligible for PPP, so long as the organization can demonstrate the funds will be used to support the distribution of locally focused or emergency information.
- Allows eligible entities to apply for both a PPP loan and the SVO grant program that was established in December 2020, though their grant amount will be reduced by the amount of the PPP loan received after December 27, 2020.
- Provides an additional $7.25 billion for PPP.
- Allocates $15 billion to the EIDL program.
- Establishes the Restaurant Revitalization Fund that will be capitalized with nearly $29 billion to provide grants to restaurants through the Small Business Administration (SBA) within weeks. Restaurants that can demonstrate revenue loss and are not affiliated with a franchise with more than 20 locations are eligible to apply and receive up to $10 million in support.
Congress is also expected to pass the bipartisan PPP Extension Act of 2021 this week, which would extend the program’s expiration date from March 31, 2021 to May 31, 2021, and allow an additional 30 days for SBA to process all applications submitted by the end of May.