8 Ways the American Rescue Plan Will Help Small Businesses

8 Ways the American Rescue Plan Will Help Small Businesses

8 Ways the American Rescue Plan Will Help Small Businesses

The American Rescue Plan Act has passed the House and Senate, and President Biden is expected to sign it this week. It includes a number of provisions that will help small business owners— including those who are self-employed or are independent contractors— in the form of grants, tax credits and forgivable loans. 

Most of these are extensions of programs that were originally included in the CARES Act passed March 27, 2020 and the Economic Aid Act that was signed December 27, 2020. However there is a brand new grant program for restaurants and similar businesses. 

Here’s an overview of what’s available to small businesses: 

1. Targeted EIDL Advances

The legislation allocates $15 billion for Targeted EIDL Advances to qualified small businesses. Targeted EIDL Advances are tax-free grants of up to $10,000 to small businesses located in low-income areas that can demonstrate a 30% or greater economic impact. This package includes $10 billion in additional funding for these grants as well as another $5 billion to fund $5000 supplemental grants for businesses with ten or fewer employees that have suffered an economic impact of at least 50%.

2. Paycheck Protection Program (PPP) 

An additional $7.25 billion is provided to fund PPP loans. The legislation also expands eligibility to certain not–for-profit organizations and digital media organizations that may not have been eligible previously. It currently does not, however, extend the deadline for PPP loans past March 31, 2021, the deadline set in the Economic Aid Act. 

3. Restaurant Grants

Restaurants and related businesses (including food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, and others) may qualify for grants of up to $5 million per location ($10 million total per business) under the newly created Restaurant Revitalization Fund. Grants will generally be equal to the pandemic-related revenue loss of the business. The SBA will administer these grants.

Funds may be used for expenses similar to PPP loans though the use of funds is somewhat broader than PPP.  The legislation does not state that a certain percentage of funds must be used toward payroll, and since this is a grant rather than a forgivable loan, applicants will not have to apply for forgiveness. 

4. Pandemic Unemployment

Pandemic Unemployment Assistance (PUA) may be available to self-employed workers, independent contractors, and gig workers who traditionally don’t qualify for unemployment. PUA is extended through Sept. 6, 2021 and increases the total number of weeks of benefits that may be available to those who cannot return to work from 50 to 74 weeks. Other forms of unemployment are extended as well. 

The first $10,200 in 2020 unemployment benefits will not be taxed (at the federal level) for households with incomes of less than $150,000 annually.

5. Employee Retention Credit

The Employee Retention Credit provides a credit for wages paid by businesses whose operations were fully or partially suspended due to a government order related to COVID-19 or that experienced a significant decline in receipts. This credit is extended through the end of 2021 and allows for a credit against Medicare tax. Startups may be eligible as well.

6. Shuttered Venue Operators Grants

Additional funding ($1.25 billion) is appropriated for the Shuttered Venue Operators grants program administered by the SBA. This program provides grants of up to $10 million to certain businesses, such as live venue operators, museums, theaters and more. While before these businesses had to choose between PPP and SVOG, now businesses may apply for both and subtract PPP funding from any SVOC grant received. 

7. Paid Family and Sick Leave

This program extends the credit for employers providing paid sick and family leave under the Families First Coronavirus Response Act to September 30, 2021. Self-employed individuals may qualify, and their number of covered days are increased. The amount of covered wages is increased as well. It also expands covered time off to include time to get a COVID-19 vaccine or to recover from one. 

8. Community Navigator Program

Funding is available for “Community Navigators,” including CDFIs and other nonprofits community organizations as well as resource partners such as SBDCs to help small business owners access programs and resources made available due to the pandemic. The SBA will establish a hotline that will provide referrals to these organizations. While this funding doesn’t go directly to small businesses, it should help more understand and qualify for assistance. 

Many of these programs will be crucial to help businesses survive the pandemic crisis. Be sure to take advantage of those that apply to your small business. 

This article was originally written on March 11, 2021 and updated on March 23, 2021.

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9 responses to “8 Ways the American Rescue Plan Will Help Small Businesses

  1. Thanks for the help & support with this vital information it’s great for small business owners like myself and others.

  2. I just discovered your website, I am overjoyed, elated , jumping up and down . I used your site to help get the ppp loan processed.
    Thanks so much for all you do to help small businesses.

    1. I apply with smartbiz for ppp loan still waiting to process and approval. I wish I would went through my local bank. It’s been over 5weeks, keeping reaching out to a advisor very slow response. Can you tell what your experience with Smartbiz.,

  3. Is there any grants for individual who took action and helped people in need during the pandemic. I have helped hundreds of house hold and over 20 business with submitting application for unemployment, PPP, Immigration, and other assistance but as an individual not as none profit organization.

  4. Is there money or grants available in Rescue Plan to start up a new restaurant idea that focuses on a particular style / type of foods that would eventually allow investors to buy into franchises of what will become a very popular & unique food(s). I have over 22 years of restaurant / hospitality experience. My idea will quickly become a place that will tap into a new venue that will create a very high demand.

    1. Paul -I don’t see anything in the American Rescue Plan that would be a fit. It’s not really aimed at startups. Generally this doesn’t sound like a typical grant opportunity and will more likely require financing. But you can use the resources we have listed to see what may be out there. There are thousands of grants so it’s impossible for me to know off the top of my head unfortunately.