The $ 1.9 trillion US bailout – what’s in it for small businesses? Program specifically for restaurants
President Joe Biden enacted the COVID stimulus bill – also known as the US bailout – on Thursday. While the focus is on direct payments of $ 1,400, there are specific spending measures tailored for small businesses.
The $ 1.9 trillion US bailout includes three programs specifically aimed at small businesses. These 3 programs total $ 55 billion.
The three programs are:
- A new $ 25 billion program specifically for restaurants
- $ 15 billion to refinance the Economic Disaster Loan Program.
- $ 15 billion to state and local governments for small businesses.
In addition, the provision that would have raised the national minimum wage to $ 15 was removed from the bill.
There are additional funds that can have a ripple effect that helps small businesses. These additional funds are part of a $ 350 billion financial assistance program for states, cities and schools.
US Rescue Plan – What Benefits for Small Businesses?
Let’s look at the specifics of the US bailout that impact small businesses. The programs will be administered by the Small Business Administration.
$ 25 billion for the restoration program
This program will provide grants of up to $ 10 million per entity. If a restaurant is a chain, the program can award $ 5 million per physical location. Grants cannot apply to more than 20 locations for the same entity.
There is a basic formula that will be used in grant applications. Subtract the 2020 turnover from the 2019 turnover.
Priority for these grants will be given to restaurants owned by women, veterans and socially / economically disadvantaged owners.
$ 15 billion for the Economic Disaster Loan Advance Program
This is the same as the program which started in March 2020. The funds reimburse the program, but there are new stipulations for the grants.
In the original program, the applicant company would have fewer than 300 employees and a 35% reduction in revenue. These requirements continue and companies that meet these requirements may still apply.
In the new program, the SBA is tasked with focusing on providing grants to businesses with 10 or fewer employees, a 50% loss of income, and / or a location in a low-income area (according to census statistics ).
$ 15 billion for state and local governments
These amounts are reserved for small businesses. The wording of the US bailout allows state and local governments to use the funds to provide low-interest loans to existing small businesses and small start-ups.
Can you get some of the money? Research the possibilities through your state and local government.
The Shuttered Venue vs PPP Dilemma
The PPP reopened on January 19 and ends on March 31. Shuttered Venue grant applications are not yet open … at this time.
Here’s the dilemma: A company cannot apply for both grants at the same time, according to the guidelines of the Shuttered Venue Operators Grants.
What should you do We don’t have an answer for that one. Your best option is to monitor the SBA website.
Runoff programs in the US bailout
Although these funds are specifically intended for small businesses, they could help them in their operations.
Here’s a quick look at how much money small business owners and their employees will benefit from, hoping to get help with child care and health insurance.
- $ 25 billion to help financially struggling child care providers. This program could remove a key barrier preventing employees from returning to a physical workplace – finding child care.
- $ 5.5 billion for education programs – This breaks down into $ 1.25 billion for summer enrichment programs, $ 1.25 billion for after-school programs and $ 3 billion for educational technology (to enhance online learning). Again, these monies can help employees and employers struggling with child care issues.
- Paid time off – The existing Covid relief program provided funding for emergency paid time off for workers who did not have this benefit with their job. The US $ 1.9 trillion bailout will extend that benefit until the end of September.
- Extended COBRA coverage – COBRA coverage would be extended until the end of September for those who have lost their jobs.