Insights into the world of small business lending and development
The American Rescue Plan—What the new relief package means for small businesses
Congress has approved a new $1.9 trillion federal relief package, more commonly known as the American Rescue Plan. The stimulus legislation, the largest of its kind, includes several measures to help stabilize small businesses and the economy.
Some of the key provisions that will aid struggling small businesses are:
- An additional $7.25 billion in funding for the Paycheck Protection Program (PPP). The program will also expand its eligibility for non-profits and digital journalism entities to apply.
- The PPP still has about $119 billion left in funds from the previous relief package.
- An additional $15 billion will go toward the Targeted Economic Injury Disaster Loan (EIDL) Advance program, which provides grants for small businesses in low-income areas.
- The Restaurant Revitalization Fund, a new grants program, will provide $25 billion in relief funding for small restaurants.
- Grants are available for up to $10 million per entity, with a limit of $5 million per physical location. Entities are limited to 20 locations.
- Grants may be used for a wide variety of expenses, including payroll, mortgage, rent, utilities, supplies, food and beverage expenses, paid sick leave, and operational expenses.
- The American Rescue Plan Act will also establish another program called the Community Navigator Pilot Program, which is set to increase awareness of and participation in COVID-19 relief programs. The program will set aside $100 million in grants for entities that support its goal.
- An additional $1.25 billion will be set aside for the Small Business Administration’s Shuttered Venue Operators Grant.
- $10 billion will go toward the State Small Business Credit Initiative (SSBCI), which will help to fund and strengthen small business financing programs in the states.
Some of the provisions that are not small-business specific include:
- $300 unemployment payments through September 6.
- For stimulus payments, individuals who make up to $75,000 and couples who make up to $150,000 get a full $1,400 check.
- Those making $80,000 for individuals and $160,000 for couples, will receive a partial check.
- A $3,000 child tax credit for families with children. For each child under the age of 6, families can receive a credit of up to $3,600.
- There are also a few new provisions that would strengthen access to healthcare for small business owners:
- Affordable Care Act (ACA) enrollees will pay no more than 8.5% (versus 10% before) of their income on health insurance premiums.
- Expands the subsidies available for people earning more than 400% of the Federal Poverty level.
- Strengthening Medicaid and expanding support for COBRA coverage for those who have been impacted by the pandemic.
- These provisions will be temporary and valid for the next two years.
As more updated information concerning the American Rescue Plan Act becomes available, we will update this page. Sign up for our weekly national and state webinars to learn about the new changes and how they affect your small business.