President Biden has signed the $1.9 trillion COVID relief bill into law, which will bring some much-needed help to small businesses and restaurants.
The new bill added $1.25 billion for shuttered venue operators and a provision that allows businesses to participate in both the PPP and the Shuttered Venue Operators Grant. The bill extends through the end of 2021 the Employee Retention Credit, which is the refundable tax credit to help employers keep employees on payroll.
The Economic Injury Disaster Loan Advance Program, which provides economic relief for businesses that lost revenue during the pandemic, will be boosted by an additional $15 billion, with $5 billion earmarked as supplemental payments for those businesses hardest hit by the pandemic.
The Food and Beverage industry will receive a significant boost from the new bill. Restaurants and related venues whose revenue fell in 2020 because of the pandemic are eligible for $28.6 billion in grants. These grants will go to eligible restaurants, bars, taverns, tasting rooms, taprooms, and other related venues. The bill allows for grants equal to the amount of the businesses’ revenue losses, up to a maximum of $10 million per company and $5 million per location. The funds can be used to cover expenses such as payroll, mortgage, rent, and utilities. The bill earmarks $5 billion for small restaurants with annual revenues of $500,000 or less.
The bill also includes expanded access to the Paycheck Protection Program (“PPP”) and adds $7.25 billion to the PPP reserves. However, the new bill did not extend the March 31 deadline to apply for the PPP, so eligible businesses must act fast if they want to benefit. By not extending the termination of the program, lawmakers made it possible that some designated funds could be left unused.
Qualifying businesses include sole proprietorships, independent contractors, self-employed, non-profits, and any business that qualifies as a “small business” by the Small Business Association. Also eligible are all businesses with an NAICS code that begins with “72,” have more than one physical location, and employ less than 500 people per location. Eligible businesses can obtain a First Draw PPP Loan or a Second Draw PPP loan if they can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a Second Draw PPP loan is $2 million.
If you have questions as to whether your business qualifies or you need assistance or direction in applying for available loans or grants, please contact Titus Brueckner & Levine.
Brad Shelts practices in the areas of business and employment law. He may be reached at [email protected] or (480) 483-9600.
