The third stimulus package is expected to pass soon, what does it mean for businesses?

The third stimulus package is expected to pass soon, what does it mean for businesses?

The third stimulus package (dubbed The American Rescue Plan of 2021) is expected to go to the House today for a final vote – in fact by the time this article goes live it may have already – and then it is expected to be signed into law by President Biden.

We’re all aware of the stipulations this has for individuals, with many receiving a third wave of stimulus payments in the form of $1400 for every adult and child that meets the current income criteria as well as many expecting an increase to the Child Tax Credit, but what in this bill is specifically outlined for businesses?

The first stimulus packages included notable relief in the form of the forgivable Paycheck Protection Program (or PPP) loans. These loans offered businesses 24 weeks of paycheck protection for their employees so they could remain in business and keep their staff even as their businesses were subject to widespread closures.

Earlier in the year we covered the benefits of the PPP and how it compared to the Economic Injury Disaster Loan (EIDL) program here.

The American Rescue Plan Stimulus bill also includes many provisions for businesses just like the first two packages did, including the following:

  • $1.25 billion for shuttered venue operators
  • $7.25 billion for the Paycheck Protection Program (PPP)
  • $15 billion for targeted Economic Injury Disaster Loan (EIDL) advance payments
  • $25 billion for restaurants, bars, and other eligible providers of food and drink
  • And $175 million to create a "community navigator" pilot program to increase awareness of and participation in COVID-19 relief programs for business owners currently lacking access

The Paycheck Protection Program in particular has allocated over $662 billion to businesses since being established 11 months ago, and there is sill $284 billion in funding available.

However, the new stimulus bill did not extend the window for applying. If your business meets the criteria and you’re considering applying for this program you must do so by March 31st of this year at which time the window is scheduled to close for good.

The current bill also has a clause to make it more available for not-for-profit businesses by including a new category entitled "additional covered nonprofit entity," we suggest meeting with your accountant or tax preparer if you think this may apply to your business.

If your business requires greater aid than the PPP provides for and you have no more than 300 employees, the EIDL program may be a better fit for you. An additional $15 billion in funding to that program will be made available in the next round of stimulus. This loan program applies to your business if you suffered a 30% or more loss in revenue during any 8 week period between March 2nd, 2020 and December 31st, 2021.

There is much more to it than we can go over here but we again suggest meeting with your accountant or tax preparer if your business suffered a loss during in the 12 months since COVID-19 began (which probably applies to many if not all of us) and think one of these programs could help your business on the path to recovery and economic growth.

Looking for more to read? We suggest these tech articles from the last week.

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