Updated 9/10/21: See Economic Injury Disaster Loan Section below for latest updates to that program.
Updated 6/1/21: The PPP loan application portal is closed. PPP applications are no longer being accepted. For more information on other grants, loans and programs available to small businesses, please see these articles:
- 30+ Grants, Loans and Programs to Benefit Your Small Business
- A Practical Guide to Funding Your Small Business with Business Loans
- 7 SBA Loans to Know About
Between March 2020 and March 2021, Congress has passed multiple massive pieces of legislation to help individuals and businesses make it through the pandemic’s economic turmoil. These packages have included forgivable loans, direct payments, tax credits, grants, expanded unemployment benefits and more.
Both Trump and Biden administrations have implemented various programs and administrative changes throughout the pandemic. The most recent coronavirus bill is the $1.9 trillion American Rescue Plan Act (ARPA), signed into law by President Biden in March 2021.
During the pandemic, so many federal aid programs and policy changes have passed that it might be hard for small businesses to keep track of them all. Below are the top coronavirus aid programs and policy changes small businesses should know.
Paycheck Protection Program (PPP) (PPP funding is not longer available)
One of the most extensive programs Congress passed to help businesses survive the pandemic is the Paycheck Protection Program (PPP), which was initially passed as part of the CARES Act and later modified multiple times. Since the PPP was authorized in March 2020, more than $700 billion in forgivable loans has been distributed to businesses.
PPP loans are issued by private lenders, credit unions and nonbank lenders but are backed by the Small Business Administration (SBA). The essential purpose of the PPP is to get small businesses to keep workers on payroll and to rehire laid-off workers. As long as businesses spend the allocated funds in approved ways, the full amount of the loan can be forgiven.
Businesses can apply for first- and second-draw PPP loans through March 31, 2021, but that deadline may be extended. They should start by talking with an existing lender first, but if that does not pan out, the SBA also has a tool called Lender Match that can help find approved PPP lenders.
Stimulus payments
Another significant way the federal government has attempted to help individuals and small businesses is the distribution of direct payments. In 2020, payments of $1,200 and $600 were disbursed to individuals that reported adjusted gross income of $75,000 a year or less or couples who jointly file with a gross income of less than $150,000 a year. In 2021, a payment of $1,4000 was authorized by Congress with similar income limits. While these payments are designed to help a wide swath of Americans, they can also help small business owners that qualify.
Read more about stimulus payments from the IRS.
COBRA Health care subsidies
One of the most significant new policy changes for employers in the ARPA is the inclusion of new COBRA health care premium subsidies for employees who have been laid off or terminated.
Employers are required to offer COBRA coverage to the majority of former employees for up to 18 months. Still, the former employee often has to pay the total cost of the coverage without the employer subsidizing the cost. The ARPA changes this so employers, plans or insurers must provide subsidized COBRA coverage to eligible individuals from April 1 through September 30, 2021.
While employers will incur higher upfront costs, the ARPA also created new advanceable and refundable tax credits to offset the costs. Employers (or plans or insurers) are able to recover the cost by claiming a tax credit against standard payroll taxes.
Read more about COBRA subsidy changes here.
Shuttered Venue Operators (SVO) grants (Now Open)
Congress created the Shuttered Venue Operators (SVO) grant program in December 2020 to help live venues that were harmed by COVID-19 restrictions. The SVO grant program will distribute $16 billion in funds to live venue operators, including eligible movie theaters, concert spaces, museums and performing arts organizations.
A significant change in the SVO grants occurred in March 2021, with the ARPA revising eligible venues. As of this writing, venues can receive first and second-draw PPP loans and still apply for SVO grants, but grant amounts will be reduced by the value of their PPP loans.
These grants are administered directly by the SBA, and the application portal is open. Notably, interested applicants should create a login.gov user account, obtain a D-U-N-S number, and sign up for SAM.gov immediately if they want to apply quickly.
The application portal for SVO grants is now open. Applicants can continue to register for an application portal account.
Read more about the SVO grants here.
Restaurant Revitalization Fund (RRF) grants
One of the most significant parts of the ARPA is the new Restaurant Revitalization Fund (RRF). This $28.6 billion grant program will specifically target hard-hit restaurants and bars. Affected entities will be able to apply for grants based on lost gross revenue between 2019 and 2020, with maximum grant sizes totaling $5 million for restaurants and $10 million for restaurant groups.
The SBA will administer and disperse the RRF grants. To apply, businesses will need to either apply through SBA-recognized point-of-sale restaurant partners or directly with the SBA using an online application portal. (No date has been set for the application portal launch as of mid-April 2021.)
The SBA will begin registrations for the Restaurant Revitalization Fund on Friday, April 30, 2021, at 9 a.m. EDT and open applications on Monday, May 3, 2021, at noon EDT. The online application will remain open to any eligible establishment until all funds are exhausted.
In preparation, the SBA recommends qualifying applicants familiarize themselves with the application process in advance to ensure a smooth and efficient application experience, specifically by:
- Registering for an account in advance at sba.gov starting Friday, April 30, 2021, at 9 a.m. EDT.
- Reviewing the official guidance, including program guide, frequently asked questions, and application sample.
- Preparing the required documentation.
- Working with a point-of-sale vendor or visiting sba.gov to submit an application when the application portal opens. [Note: If an applicant is working with a point-of-sale vendor, they do not need to register beforehand on the site.]
Read more about RRF grants here.
COVID-19 Economic Injury Disaster Loans (EIDL)
SBA announces significant enhancements to the COVID Economic Injury Disaster Loan (EIDL) program
The hard hit small business community will now be eligible for much needed additional financial assistance through several major enhancements that are being implemented as part of the U.S Small Business Administration’s (SBA) COVID Economic Injury Disaster Loan (EIDL) program. Effective immediately, applications are open for loans with borrowing limits of up to $2 million vs. the previous cap of $500,000. As part of the loan enhancements, repayments can now be deferred for 24 months from the date they were issued. Also announced, a 30-day exclusivity period during which loans of $500,000 or less will be reviewed, approved and distributed, allowing for easier and and more immediate access to a share of the estimated $150 billion in funds available for capital and operating expenses including payroll, equipment purchases and paying off debt. EIDL funds will additionally now be approved for pre-paying commercial debt and to alleviate federal business debt. A detailed outline of the key changes, important dates and guidance on how to apply is available on the SBA website.
Read more about COVID-19 EIDL loans here.
Employee Retention Tax Credit (ERTC)
A vital tax credit every business with fewer than 500 employees should know is the Employee Retention Tax Credit (ERTC). The ERTC was first created in the CARES Act in March 2020, but it was not accessible for many businesses. Since that time, the ERTC has been modified and expanded by Congress twice so many more companies can use it.
Businesses that experienced a decline in gross receipts by more than 20% in any quarter of 2020 compared to the same quarter in 2019 are eligible. As of March 2021, this refundable tax credit can be worth up to $7,000 per employee per quarter. This means companies could receive a credit for $28,000 per employee during 2021, a substantial sum that can help companies recover to pre-pandemic revenue numbers.
Read more about the ERTC here.
Expanded family and sick leave
The Families First Coronavirus Response Act (FFCRA) was signed into law in March 2020 with the goal of providing assistance to employees and households affected by COVID-19. One important provision was making it possible for employers with fewer than 500 employees to receive tax credits to cover the costs of emergency paid sick leave.
The employer tax credits for FFCRA benefits were first expanded in the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) through March 31, 2021. Then the ARPA extended the same tax credits through September 30, 2021. Under the current law, employers are not required to offer sick leave, but if they choose to, they can receive tax credits for up to $5,000 per employee.
Read more about the new family and sick leave changes here.
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