American Rescue Act Plan: Update for Business Owners

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Many small businesses have already taken advantage of the government assistance that’s been offered in the wake of a country-wide shutdown and economic interruption due to COVID-19. The United States government has and continues to provide a wide array of stimulus to businesses and citizens alike, including the American Rescue Plan Act. This Biden-administration implemented rescue plan is included in the $1.9 trillion dollar economic package designed to build upon the 2020 CARES act.

This bill includes individual stimulus checks, PPP updates, and additional unemployment and grant money to be distributed to American citizens. We’ve tabulated some of the benefits and ways to access them so that you, your business, and your employees can get proper assistance as we move towards a re-opened economy.

Restaurant Revitalization Fund

The Restaurant Revitalization Fund, or RRF, is a component of the American Rescue Plan of 2021. There is a $28.6 billion dollar allotment to be distributed as a lifeline to the restaurant, bar, and food service industry to cover lost revenue during the pandemic. The funds will cover losses incurred from Feb 15, 2020 to Dec. 31, 2021, and are designed to help small to mid-cap restaurants (which is a broad designation for places of food and beverage service) with fewer than 20 locations.

cartooned owner holding a part

You can apply for the RRF as a proprietor of any of the following establishments:

  • Restaurant, diner, or catering kitchen
  • Food stand, food cart, or food truck
  • Bar, tavern, saloon
  • Tasting room, brewpub, or taproom
  • Any other drinking establishment or a venue that acts as a public provider of food and beverages served.

The funds you apply for will be based on your operating costs, including inventory, projected revenue, and most importantly, payroll.

It is important to note that you are eligible to receive RRF funding concurrently with PPP loans, but the amount of your PPP loan will be deducted from your potential grant cap. Make sure to consult with your accountant or other financial professionals to get the best representation of all figures used when applying for any government aid.

PPP Updates

With the implementation of the American Rescue Act Plan, there is also new guidance for existing PPP loans and future ones. There have been changes to eligibility, forgiveness qualifications, and lending guidelines.

Among the most important changes for small businesses to take into account are:

  • Small businesses who qualified for additional funding must have submitted for first-or-second draw PPP loans by March 21, 2021.
  • Nonprofits with fewer than 500 employees per location are now eligible for first-time PPP loans. Similarly, ones with fewer than 300 employees are eligible for a second draw.
  • Internet-only news publishers or periodicals are eligible to receive first and second PPP draws, whereas they were not deemed eligible prior.

PPP forgiveness is additionally expanded to include payments for COBRA or other health insurance continuation. As with all ARPA bill updates, we recommend reviewing the bill with your accounting team to understand how it is worked into the full American Rescue Act Plan.
small business payroll

Economic Injury Disaster Loan Advance

Prior to the American Rescue Act plan, economic injury disaster loan advances had some effects on other forms of grant funding or PPP loans. With the update in legislature, there are now eligible EIDL loans available that do not necessarily draw from your PPP forgiveness eligibility, as well as additional rounds of funding for previously ineligible businesses.

Similarly, there is $15 billion in additional EIDL funding added for certain businesses that are designated as hard-hit, along with non-profits or businesses that are in low-income communities. If you have already submitted an EIDL application that is still pending or waitlisted, it is not advised to duplicate it. However, if you have already resolved a prior EIDL loan or do not have an existing account to begin with, your business may qualify under the American Rescue Act.

Unemployment Benefit Provisions

Included in the $1.9 Trillion dollar package are refundable tax credits for employers who have provided FFCRA paid sick or family leave during the first round of ACA funding. Additionally, there are additional covered reasons for providing sick leave, paid family leave, and an extension of duration for sick paid and family leave.

cartoon looking at piggy bank

For employers, this functionally extends the amount of tax credits to include:

  • Up to $511 per day based on employee’s rate of pay if the employee is on leave due to coronavirus-related reasons
  • Employers who provide paid family leave will receive a tax credit with up to a cap of $200 per day at a 2/3 rate of the employee’s rate for paid leave
    • Additionally, the ARPA removes the two-week waiting period for taking paid emergency family leave
  • Provisions for non-discrimination rules for employers who were voluntarily providing leave and getting tax credits in return
    • This is predominately to make sure employers are not discriminating their leave policies based on wage, full or part-time status, or tenure.

With these updates for UI benefits as well as the additional guidance on how employers can receive tax credits, it should provide a more defined and stable environment for qualified leave.

Small Business Support at Paytech

At Paytech, we understand that it can be difficult to run your business while simultaneously catching every change in legislature. We have decades of providing consulting, guidance, and setting our clients up for success. We’ll work with you one on one to understand how your specific business can take advantage of the resources available – plus we don’t charge you an hourly rate for every question you may have.

We partner with our clients to provide them the most accurate information about how to take advantage of these opportunities in a way that makes sense for their unique business and keeps their doors open. If you are interested in partnering with us to provide your organization the best options under the new American Rescue Act Plan, reach out today. We’d love to start a conversation for a more profitable tomorrow.

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