Yesterday afternoon, President Biden signed the much-reported American Rescue Plan Act of 2021. This is the third relief package that has been passed into law by the federal government over the past year. Now that the $1.9 trillion stimulus relief package is signed into law, what does this mean to you and your business?
The attorneys at Vorys provided a great breakdown for how this law will impact businesses. The Act includes relief for businesses, particularly through new and expanded Small Business Administration programs. Perhaps the newest and biggest change in this package is the inclusion of direct relief to restaurants.
The restaurant and hospitality industry has long advocated for targeted relief, and the American Rescue Plan Act delivers that for the first time in the form of a $28.6 billion restaurant revitalization fund. Eligible restaurants can receive up to $5 million—$10 million for businesses with multiple locations—that can be used to cover payroll, mortgage and rent, utilities and vendor expenses. Eligibility will be determined by comparing 2020 and 2019 revenues, with the aim of compensating restaurants for lost revenues while their businesses were shuttered and individuals were asked to stay home. Five billion of the total amount will be set aside for restaurants with under $500,000 in 2019 revenue.
The Economic Impact Disaster Loan (EIDL) program will also receive $15 billion for an Advance Grant program. The new program is designed to help businesses that previously applied for a grant under the EIDL Advance program—a now-terminated program that provided up to $10,000 grants to struggling businesses early in the public health emergency—but that did not receive the full amount. The SBA will contact businesses that may qualify and will provide more detailed eligibility and application instructions.
The Paycheck Protection Program also received an additional $7 billion in funding, but not an extension of time as many had hoped. The program is still scheduled to end on March 31, 2021. The major provisions of the program remain the same, although there was a slight expansion in eligibility to permit larger nonprofits to apply. Additionally, the Act provides $1.325 billion in administrative funding to the SBA to give the agency the resources and manpower necessary to implement these programs.
Other business relief provisions include an expanded and extended employee retention credit; $1.25 billion for the Shuttered Venue Operators Grant program; tax credits for employers who voluntarily continue to offer the paid sick and family leave benefits provided in the CARES Act; $130 billion for K-12 schools and $40 billion for institutes of higher education to help them reopen by investing in improved ventilation systems and PPE purchases; $39 billion to child care providers to help them offset operating expenses and help families pay child care costs; and $350 billion in aid to state and local governments that can be used to address COVID-19’s economic effects through aid to households, small businesses, nonprofits and affected industries such as tourism and hospitality.
In the days and weeks coming, there will be more guidance provided and needed in order for businesses to take advantage of this next round of relief. As more information becomes available, we will be sure to provide that to you.