Your business now has two more months to apply for either your first or second round of PPP Loans.
This month, we are going to unpack how the American Rescue Plan Act, the most recent law passed by the federal government, impacts you and your business. The economy is being flushed with cash, $1.9 trillion, and it is good to know where it is flowing so you can figure out how to benefit.
There are seven major categories for where the money is going: people, health care, Native American Tribes, education, veterans, state and local allocations, and small businesses. It is helpful to know the major categories of where the money is pooling, as your business and employees may be able to sell your services and products directly to those organizations and institutions that are being pumped up.
The American Rescue Plan acts very similarly to when somebody receives a large dose of antibiotics and quickly begins to recover, but as we all know from experience, if we stop taking the antibiotics because we feel better, we relapse in our recovery and the whole process takes longer. This is a good metaphor to keep in mind, because as the Rescue Plan Act gives us and our businesses a boost, it will not guarantee a steady and swift recovery. The true recovery comes from our own (individual and business) fiscal resilience, and that means having savings, managing our cashflows, knowing our business and individual “redlines,” following a budget, and adapting our business models to reflect the new recovering economy.
Many businesses are already adapting their business practices in this new “Viral Economy” we find ourselves in by managing inventory, credit terms, where and how they market, altering staffing solutions to be flexible and finding new markets for sales. Now that we are thinking both in terms of where the stimulus money is for business and what we must do on our own to keep our business recovery steady, we are better positioned to make the most of the opportunities as they apply to our businesses.
The very best way to get your business cashed up still remains the SBA’s Paycheck Protection Program (PPP), and the Rescue Plan Act is making those PPP loans more accessible and really targeting those businesses most severely impacted (restaurants and bars). The PPP eligibility has been expanded to include all businesses, including non-profits with the exception of 501(C)4, Lobbying Organizations. This means that all other non-profits, limited liability companies, sole operators, limited partnerships, independent contractors, and gig workers may qualify to apply for a PPP Loan. The extended application deadline is now May 31.
Your business now has two more months to apply for either your first or second round of PPP Loans. This article does not focus on the eligibility and program criteria that make the PPP the best source of cash for businesses affected by the pandemic, as past articles have addressed this point and a quick Google search can explain the benefits and costs.
Restaurants and bars have a newly-created Restaurant Revitalization Fund, which offers financial support to family and privately-owned establishments and those chains with fewer than 20 locations. A sizable amount ($5 billion) is available for small restaurants and bars with less than $500,000 in revenue for 2019. It has been created in conjunction with the Restaurant Revitalization Fund. Applications are expected to be opened this month and administered by the SBA; therefore, bookmarking this page sba.gov/funding-programs/loans/covid-19-relief-options and keeping an eye on updates will keep you and your business in direct contact with the latest information and applications.
The SBA either directly administers or facilitates administration of the major financial programs mentioned in this article, PPP Loans, Restaurant Revitalization Fund, the EIDL program, Shuttered Venue Operators Grant Program and the Community Navigator Pilot Program.
Economic Injury Disaster Loans (EIDL) continue to be viable options for access to operating cash, albeit not as forgivable as PPP Loans. This SBA-administered loan fund has an additional $15 billion injected into its lending pool. A clean grant option is available, known as the Shuttered Venue Operators Grant Program. This program received an additional $1.25 billion under the Rescue Plan Act. Two other federal programs have received major cash injections, both of which are aimed at connecting local, small businesses with financing available to them through state, tribal and local government programs, known as the Community Navigator Pilot Program and the State Small Business Credit Initiative.
Essentially, these programs are now coming online with funding to increase the availability of business financing capital through small local, community and non-profit lenders, which is a good thing for stabilizing business recovery and developing economic resilience in our business community.
To learn more about specific business opportunities or other American Rescue Plan Act category allocation details and what impacts they may have, please feel free to connect with me by email or phone. FBN
By Chris Pasterz
Chris Pasterz is the Coconino County economic development manager. Pasterz can be reached at firstname.lastname@example.org or 928-679-7134.