Details on PPP, EIDL, small biz items in American Rescue law
PPP loans up for minorities, women and rural owners;
Grants for restaurant and venue owners starting soon
The American Rescue Plan law approved two weeks ago is bringing additional loans, grants and other benefits to small businesses, and details continue to unfold on how the dollars are being distributed and for how long.
Paycheck Protection Program (PPP)
Congress approved an additional $7.25 billion for PPP, expiring on March 31, although there is legislation pending that would extend the date.
The Biden Administration set up an exclusivity period in which only loans from very small firms with fewer than 20 employees would be considered.
That two-week exclusivity period from Feb. 24-March 9 resulted in significant increases in loans to small firms owned by minorities, women and rural owners, the Small Business Administration said in a news release.
In total, more than 400,000 very small businesses and nonprofits were serviced during the exclusivity period as of March 7.
Loans to minority-owned firms were up by 20% during the period, in comparison to the preceding 10 days. That represents an additional 1,000 such firms receiving PPP loans each day during the period, the SBA said.
Also, loans to women-owned small companies rose by 14%, with 600 additional loans each day. And loans to rural-based small firms increased by 12%, or 1,000 additional loans each day during the period.
In addition:
- The SBA approved an interim final rule allowing sole proprietors, independent contractors, and self-employed individuals to receive larger PPP loans by revising the PPP’s funding formula. The rule also allows additional owners to apply, including those with non-fraud felony convictions or delinquent student loans.
- The House on March 16 approved bipartisan legislation to extend the expiration date for applying to the PPP program to May 31, and to allow SBA to process applications for 30 more days after that date. At press time, a similar bill was pending in the Senate.
EIDL Deferments until 2022
The SBA announced extended deferment of first payments on all disaster loans made in 2020 and 2021, including those under the COVID-19-related Economic Injury Disaster Loan (EIDL) program.
All SBA disaster loans made in calendar year 2020, including EIDL loans related to COVID-19, will have first payment due dates extended to 24 months, up from 12 months currently.
All disaster loans made in 2021, including the EIDL COVID-19 loans, will have their first payment deferred for 18 months, up from 12 months currently.
The American Rescue law provides $15 billion in additional funding for Targeted EIDL advance payments, including $5 billion for supplemental payments for those hardest hit.
Restaurant Revitalization Fund
The law allocated $28.6 billion for struggling restaurants in the Restaurant Revitalization Fund, to be managed by the SBA. Applications are not yet available.
The maximum grant amount is $10 million. See the National Restaurant Association’s guidance on eligibility for the grants at https://bit.ly/3d0eN9x.
Shuttered Venue Operators Grants
The Rescue law allocated $16 billion for Shuttered Venue Operators Grants. Applications open April 8 at
https://www.svograntportal.sba.gov/s/.
There also is $100 million to establish a Community Navigator pilot program to raise awareness of the various COVID-19 federal relief programs.
More information:
SBA releases: https://bit.ly/3sa8whG
and: https://bit.ly/3r6xw8q
Interim final rule: https://bit.ly/392hLcw
