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American Rescue Plan Act: What Business Owners Need to Know

President Joe Biden signed the American Rescue Plan Act into law which supplements relief efforts for Americans deeply impacted by the COVID-19 pandemic. In the plan are a number of new initiatives dedicated to helping small business owners and improvements to existing programs like expanding Paycheck Protection Program eligibility.

The American Rescue Plan Act (ARPA) includes a number of important provisions for employers that will provide much needed relief to small business owners across the United States. ARPA has extended and expanded the tax credits available through the Families First Coronavirus Response Act (FFCRA) to employers who chose voluntarily to extend paid COVID-19-related leave to their employees through September 19th, 2021. 

In addition to FFCRA expansion, ARPA extends other federal COVID-19 relief programs including:

  • Paycheck Protection Program (PPP) extension and expansion
  • Continuation of enhanced unemployment insurance benefits
  • COBRA premium subsidies
  • Extension and expansion of the employee retention tax credit 

Paycheck Protection Program Updates

Under  ARPA, Paycheck Protection Program (PPP) eligibility has been expanded and deadlines extended for a number of different industries and sectors. An additional $15 billion has been added to the Economic Injury Disaster Loan (EIDL) fund for grants to be awarded to support small businesses.

ARPA has expanded PPP loan forgiveness for applications received after March 10, 2021 to cover premiums payments made on behalf of people who qualify for Consolidated Omnibus Budget Reconciliation Act (COBRA) health insurance continuation coverage.

The PPP program expansions and modified loan forgiveness rules benefit non-profit organizations, online news publications, shuttered venues, and restaurants.

PPP Updates for Non-Profit Organizations

PPP program expansion enables some non-profits that have 501(a) tax exempt status to be eligible for first draw PPP loans. 501(c) non-profits that are ineligible for this funding include 501 (c) (3), (4), (6), and (19). Check with your accountant or the SBA’s EIDL page for more information on your eligibility. 

For NPOs that are entitled to apply, the following factors impact eligibility:

  • Less than 300 employees per location
  • Lobbying activities account for less than 15% of total receipts and activities AND
  • Lobbying activity costs must exceeded less than $1 million for TY2020, ending February 15, 2020
  • 501(c)(3) nonprofits that employ less than 500 people per physical location can now apply for first draw PPP loans

Additional Nonprofits may also be eligible to receive second draw PPP loans if they meet the revenue and size criteria. Eligibility for these second draw loans do NOT include organizations that would be ineligible if they were businesses rather than not for profit.

PPP Updates for Online News Publishers

News and periodical publishers that operate online only are now able to apply for and receive first and second PPP loans if they fall within eligibility guidelines.

To be eligible, these businesses must:

  • Employ less than 500 employees per location OR
  • Meet North American Industry Classification System (NAICS) size standard; AND
  • Be able to show that the loan funds will go towards programs within the organization that support local or regional news

Shuttered Venue Operators Grants

The Shuttered Venue Operators Grant (SVOG) was created as part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, better known as the Economic Aid Act established on December 27th, 2020. It is intended to assist the numerous entertainment venues that have been compelled to close their doors due to the pandemic. The American Rescue Plan Act has injected another $1.25 billion into that program to further assist these businesses that continue to be closed in order to stop the spread of COVID-19.

Under the Economic Aid Act, venues were barred from applying for the SVO grant if they had also applied for Paycheck Protection Program loans after December 27th, 2020. Now, this restriction has been lifted enabling venues to apply for funding from both programs. If you have applied for a PPP loan, that amount will be subtracted from the total amount of the SVO grant you are awarded under the American Rescue Plan Act. 

Venues are considered eligible for SVOG funding if they meet the following criteria:

  • Fall under one or more of the following categories:
    • Live venue operator/promoter
    • Theatrical producer
    • Live performing arts organization operator
    • “Relevant” museum operator
    • Motion picture theater operator
    • Talent representative as defined by the Economic Aid Act
  • Must not be a publicly traded corporation or majority owned by one
  • Received less than 10% of 2019 gross revenue from the federal government
  • The venue must have been fully operational on February 29th, 2020
  • The venue’s gross earned revenue must be at least 25% less during one quarter in 2020 compared to the same quarter in 2019
  • Must intend to resume operations

Additionally, venues can apply for PPP loans while they wait for SVOG funding to become available. There are other eligibility considerations and requirements of eligible venues that can be found on the SBA website. The Small Business Administration (SBA) believes that the application process will be opened in early April. You can sign up to be notified when applications open on the SBA SVOG Application web page.

To get started with your pre-application preparation, the SBA has compiled this comprehensive checklist that will help.

Restaurant Revitalization Grants

$28.6 billion in funding has been earmarked for restaurants in the Restaurant Revitalization Fund, and will be released through the Small Business Administration (SBA). The restaurant industry has been among the very hardest hit by pandemic containment policies and this funding is intended to help restaurateurs stay on their feet. 

The SBA is going to be publishing the program rules soon and once it does so, the application process will be opened to restaurants that meet the eligibility criteria. 

  • The restaurant cannot be a publicly traded company
  • The company must not have been operating more than 20 locations as of March 13, 2020
  • Like other pandemic relief programs, business owners must be able to prove that the pandemic has caused disruptions to their continued operations.

The Restaurant Revitalization Grant would release funding relative to what the restaurant has lost due to the pandemic. This will be calculated by comparing revenue from RY2019 and RY2020, with funding being equal to the difference in revenue between those two years.  If your restaurant has benefitted from Paycheck Protection Program (PPP) loans, you must subtract that amount from the revenue loss you report on your Restaurant Revitalization Grant application. This grant is capped at $10 million per entity, with a limit of $5 million per location should a restaurant have several locations.  

Business owners can use funding from this grant for the following and other costs:

  • Operational expenses
  • Payroll
  • Paid sick leave
  • Rent
  • Principal or interest on mortgage payments
  • Utilities
  • Construction of outdoor dining patios
  • Inventory expenses related to food and beverages

As with any grant, it is important to keep meticulous records of where funding has been used to show that the grant requirements are met in the event of an audit.

Details are not yet available on the SBA website, but will be here in coming days, so check their site often for updates.

Applying for Grants Under the American Rescue Plan Act

The Small Business Administration (SBA) is currently working out the rules for each program and the application processes will get underway soon, with most commencing sometime in early April. Small business owners can do some early preparation work before the application process is open so that they can apply as soon as the SBA gives the green light.

  • Carefully review grant eligibility criteria and collect the necessary financial and business information you will need to prove eligibility.
  • If you have not done so already, obtain a Data Universal Numbers System (DUNS) number.
  • Register with the System for Award Management (SAM), which is a governmental web-based application that collects, stores, and verifies business information pertaining to federal grant applications.
  • The process takes around two weeks, so starting early ensures your business will benefit from the funding that has been made available by the American Rescue Plan Act. You can check your business SAM status here.

The things that impact small business owners are important to the payment processing professionals at Sekure. Find out how our experienced, certified payment advisors can help you grow your business by contacting us today.

Jennifer Mullen
Jennifer Mullen
Jenn is Sekure's Content Marketing Manager, and a passionate advocate for small business owners. In her spare time, she has deep conversations with her cats Chairman Meow and Oscar Wilde. Her dog Loki comforts her when she loses at board games played with her husband, son, and daughter.

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