What's in the $1.9 Trillion American Rescue Plan for Small Businesses?

The American Rescue Plan Act (ARP) has been all over the news for the last few weeks, with pundits and politicians discussing its various benefits, as well as their views on its shortcomings. Now that the $1.9-trillion-dollar measure has been signed into law, do you know what it contains beyond stimulus checks for those who qualify? Its support goes well beyond that, providing historic benefits to families with children, as well as to America's small businesses. Let's take a closer look at how restaurants and other organizations will benefit from the new law.

What's inside the American Rescue Plan?

The first COVID-relief package passed in 2020 included the Paycheck Protection Program, which provided small businesses with loans that were forgivable if a minimum of 60% of the money received was spent on payroll expenses and the balance spent on business expenses including rent payments or mortgage interest, personal protective equipment, and utilities. The law signed on March 11^th, 2021makes another $7.25 billion available to provide loans to a broader category of organizations, including nonprofits and digital media organizations that communicate valuable local public health guidance information related to the pandemic.

Unfortunately, the monetary extension did not extend the deadline for getting one of these loans, which the original relief program set as March 31^st of this year. With a substantial backlog of companies awaiting word on whether their previously submitted loan applications will be approved by the Small Business Administration, the utility of the additional funding is under question. Many financial organizations, including the American Institute of CPAs and others, have asked Congress to move the deadline into the future. Failing that, allowing the Small Business Administration (SBA) to continue processing loans that have already been received by the deadline would provide some measure of good faith.

Despite the fact that over 7.6 million PPP loans valued at over $678.4 billion had been approved as of March 7^th of 2021, the approval process can be time consuming, and the SBA frequently needs clarification on specific details or additional information in order to provide approval of a business owner's application. The process frequently takes 1 - 2 weeks before a lender receives authorization or gets word that an application is deemed ineligible.

ARP to Benefit Minority-owned Businesses, Restaurants, Venue Operators

The new law contains several provisions specifically intended to boost small businesses. These include:

• The State Small Business Credit Initiative – This provides $10 billion to state governments, allowing them to make low-interest loans and leverage private capital and other types of investments in support of small businesses impacted by the pandemic.
  
  
• Grant program for restaurants – The legislation establishes a fund valued at almost $29 billion for the specific purpose of providing restaurants with the funds that they need to recover from the economic impact of the pandemic.
  
  
• Economic Injury Disaster Loan grants program– This makes $15 billion available to companies — and particularly those that are minority owned - that serve underserved communities.
  
  
• Shuttered Venue Operators Grants program – This program was established in the earlier economic aid package, and under the ARP will receive an additional $15 billion in funding specifically to support venues such as museums, concert halls and theaters that were forced to close as a result of the health restrictions imposed by the pandemic. These organizations will also be eligible for PPP loans.
  
  
• Support for the Small Business Administration – The Small Business Administration has been responsible for processing many of the programs and application processes tied to the various economic relief bills that have been signed into law and will continue to shoulder this responsibility. In support of their efforts the new law adds $1.325 billion to their existing budget.

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All Articles by Frank Jenkins Jr