The economic stimulus bill known as the American Rescue Plan Act of 2022, signed into law by President Biden on March 11, 2022, is designed to facilitate the country’s recovery from the devastating economic and health effects of the COVID-19 pandemic. Known as the ARP (and sometimes because the ARPA), it comes twelve months following the passage of the CARES Act and just over 8 weeks following the Consolidated Appropriations Act of 2022.
This new $1.9 trillion stimulus bundle extends and expands most of the programs and measures established through the earlier stimulus bills and helps to create some new ones as well.
With this short article, we’re likely to keep our concentrate on the ARP provisions which are meant to help small businesses. Read on to understand the way your business can benefit from this latest stimulus bundle.
More Funding For The PPP
The Paycheck Protection Program, or PPP, would be a key part of last year’s stimulus legislation. Though beset by problems from the beginning, the PPP has provided countless billions of dollars in forgivable loans to businesses and other entities that have been impacted by the COVID-19 pandemic.
The ARP provides $7.25 billion in funding for the PPP. It also tweaks the eligibility criteria for receiving a PPP loan in order to better concentrate on the small businesses that really need financial assistance. However, the primary reason for this program is unchanged: it's designed to incentivize businesses to retain their employees while also helping businesses cover other operating expenses. If you’re seeking to apply for a PPP loan, read our help guide to applying for a first or second draw PPP loan. You may even want to read our guide to PPP loan forgiveness so you don’t wind up spending back the loan.
I’ll observe that while the ARP provided more funding for that PPP, it didn't extend the March 31, 2022 application deadline. However, a bill pushing this deadline to May 31, 2022 has just been signed by the President and it is now law. However, the accessible funding might run out before May 31, so that your likelihood of funding success will increase the sooner are applying.
More Funding For that EIDL Program
Along with allowing the PPP, the initial CARES Act expanded the present Economic Injury Disaster Loan (EIDL) program, establishing it as another route for businesses hit through the pandemic to get emergency funding. The program offers both grants and low-interest loans to eligible businesses. Read our piece on trying to get an EIDL loan or grant (in contrast to a PPP loan, are applying directly to the SBA) as well as our article on EIDL forgiveness (more often than not, an EIDL loan can't be forgiven, but an EIDL grant or advance is going to be).
The ARP doesn't allocate more money for EIDL loans (if you can still make an application for one if you qualify). However, the ARP does provide another $15 billion in funding for targeted EIDL grants, which we’ll enter into in the next section. Additionally, the SBA recently announced the deferment period for EIDL loans will be extended to 2022 which the maximum borrowing amount to have an EIDL loan goes from $150,000 to $500,000 beginning a few days of April 6, 2022.
More Funding For The Targeted EIDL Grant Program For Underserved Communities
As stated above, the ARP provides an additional $15 billion in funding for that Targeted EIDL Advance program. $10 billion of this funding goes to the present Advance program, which, established by the stimulus round passed in December, provides grants as high as $10,000 to applicants in low-income communities who previously received an EIDL Advance for less than $10,000 or those who previously applied but did not receive EIDL funds because of insufficient available funding. The SBA is contacting people who qualify; you cannot directly make an application for this funding.
The remaining $5 billion of this new targeted EIDL grant funding goes to a brand new program, the Supplemental Targeted EIDL Advance program. Although the SBA has not yet established a credit card applicatoin process for the program, eligibility requirements will be the following:
- You should have been directly affected by the COVID-19 pandemic
- You must be situated in a low-income community
- You should have suffered a fiscal loss more than 50%
- You must have been in operation since at least January 31, 2022
- You must employ no more than 10 employees
Extended Deadline For The Employee Retention Credit
Another provision of the ARP extends the deadline for that Employee Retention Credit. The program is, as the name implies, a tax credit program meant to incentivize businesses to retain their employees. Our article on the Employee Retention Credit explains the ins and outs from the program — I’d advise reading the piece to learn the way your small company may are in position to benefit.
The ARP extends the ERC from June 20, 2022 until the end of 2022. Additionally, it makes a quantity of highly technical changes to the program regarding the wages permitted to be claimed, the types of taxes the tax credit may be claimed against, and much more. The following article lays out each one of these alterations in detail.
New “Restaurant Revitalization Fund” For Businesses In The Food Service Industry
Eateries of all types are in position to benefit from the ARP through the creation of the Restaurant Revitalization Fund. Although the application process isn't yet open, the $28.6 billion fund will distribute grants (not loans!) to eligible restaurants along with other foodservice businesses. $5 billion in funding is preliminarily earmarked for eateries with gross receipts of no more than $500,000 during 2022.
The following article details how a restaurant must spend these grant funds in addition to how a restaurant can use when the SBA begins accepting applications.
New “Community Navigator Program” For Community Organizations
Finally, the ARP allocates $175 million to the new Community Navigator Program. The program is designed to support business assistance organizations in their efforts to support smaller businesses and entrepreneurs, particularly those who are women, veterans, POC, and also the economically disadvantaged. The program’s first initiative will be a pilot program targeting businesses owned by women and/or by Indigenous peoples.
