New & Expanded Small Business Funding Options Under the American Rescue Plan Act
With the signing of the $1.9 trillion American Rescue Plan (ARP) Act of 2021 on March 11, can more small business owners finally breathe a sigh of relief? Here’s all you need to know about how this new legislation could help your business.
Newly Created Restaurant Revitalization Fund (RRF)
The most notable new small business measure in the American Rescue Plan is the $28.6 billion Restaurant Revitalization Fund (RRF). This fund is for small business grants for restaurants and bars which have been severely affected by the pandemic and can demonstrate revenue losses from 2019 to 2020.
This new program will be administered through the Small Business Administration (SBA) and is expected to roll out early April. You can check out Restaurants Act for detailed information on this and other programs for the industry.
Shuttered Venue Operators (SVO) Grant Program Changes
Originally established in the earlier stimulus package, the Shuttered Venue Operators grant is aimed at operators of museums, theaters, and other “nonessential” venues that were required to close during the pandemic. This program has received additional funding under the American Rescue Plan. More notably, the current changes allow these businesses to apply for both these grants and PPP loans, which they were previously unable to do.
Grants for Underserved Businesses
In our earlier article, we mentioned that the American Rescue Plan would include a $15 billion new grant program for small business owners. Although that didn’t come to fruition as expected, another $15 billion was allocated to the Economic Injury Disaster Loan (EIDL) and earmarked for businesses in underserved areas, with an emphasis on minority-owned businesses.
Private Capital/State Small Business Credit Initiative
$10 billion has been allocated to state governments to use private capital to make investments and low-interest loans through the State Small Business Credit Initiative. This initiative already existed but has received additional, specific funding under the current package. Check your local and state government websites to see what programs may be available for your business.
Expansion of Payment Protection Program (PPP) Funds
The ARP approved another $7.25 billion for the popular Paycheck Protection Program (PPP), which offers loans to small businesses and different associations hurt by the pandemic. These loans have a 1% interest rate and are forgivable if they meet certain criteria. Although not part of the ARP, it is important to note that the deadline for applications has been extended to May 31st.
Under the current package, more nonprofits and other types of organizations are now eligible. Due to other recent changes, the program is more equitable, with a focus on reaching small and low- and moderate-income (LMI) businesses that have not yet been able to attain the loans. The SBA says it’s “developing this program starting from the earliest stage working quickly to ensure…these fundamental awards are conveyed to those the law planned to help.”
How to Apply
All federal programs mentioned above (RRF, SVO, EIDL, and PPP) are being administered through the Small Business Administration. You can learn more about each program at SBA.gov.
The Restaurant Relief Fund information is not yet available but National Restaurant Association Executive Vice President Sean Kennedy recommends that qualifying establishments prepare immediately by registering with the government’s System of Award Management (SAM). This can prevent unnecessary delays once the program launches.
Preparing To Resume Business
Businesses have had a rough time of things, but with the vaccines arriving and pandemic case numbers dropping globally overall, enterprises are likely to begin resuming regular operations soon. As this happens, make sure you are prepared with the funding you need.
If you do not qualify for any of the options above but are ready to pursue other types of funding, we’re ready to assist with the creation of our top-rate business plans, market research, financial models, or other business presentations or planning services.