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Continuing updates on new legislation will be provided as it becomes available and as it pertains to business owners struggling in the wake of the coronavirus. — Getty Images/brightstars

February 22, 2021 Update: The Biden Administration has announced changes that will impact access to Paycheck Protection Program (PPP) loans. The Small Business Administration (SBA) will only accept applications for PPP loans from businesses and nonprofits with fewer than 20 employees for two weeks starting February 24. After the two-week period ends, all other companies that have not already applied for first- and second-draw PPP loans will be able to apply until March 31, 2021. The SBA will also initiate additional changes designed to “open the PPP to more underserved small businesses.” Read more from the SBA here.

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Throughout 2020, multiple coronavirus relief packages were approved by Congress and signed by President Trump to offer financial assistance to businesses. Here’s a breakdown of what’s in each package and how your business can take advantage of these relief efforts. We will continue to update this story as we obtain more information.

Coronavirus Preparedness and Response Supplemental Appropriations Act

What is it?

Signed into law on March 6, the Coronavirus Preparedness and Response Supplemental Appropriations Act provided $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak, enabling the U.S. Small Business Administration to offer $7 billion in disaster assistance loans to small businesses impacted by COVID-19.

What does it mean for small businesses?

  • The SBA offered designated states and territories low-interest federal disaster loans to small businesses suffering substantial economic harm as a result of the coronavirus.
  • These loans were allowed to be used by small businesses to pay fixed debts, payroll, accounts payable and additional bills that can’t be paid because of COVID-19’s impact. The interest rate was 3.75% for small businesses without other available means of credit. The interest rate for nonprofits was 2.75%. Businesses with credit available elsewhere were not eligible.
  • The SBA loans came with long-term repayments, up to a maximum of 30 years, in an effort to keep payments affordable. Loan terms were determined on a case-by-case basis, according to an individual borrower’s ability to repay.
  • The SBA amended its disaster loan criteria to help borrowers still paying back SBA loans from previous disasters. By making this change, deferments through December 31, 2020, were to be automatic. Hence, borrowers of home and business disaster loans do not have to contact SBA to request deferment.

Where can I learn more?

For everything you need to know about applying for a small business loan, see the U.S. Chamber’s Small Business Loan Guide.

Families First Coronavirus Response Act

What is it?

Signed into law on March 18, the Families First Coronavirus Response Act (FFCRA) contains provisions designed to provide assistance to employees and households with eligible children affected by COVID-19. Key components include:

  • Mandatory emergency paid sick leave for covered employees who, as a result of COVID-19, are quarantined, symptomatic or caring for a symptomatic individual, or caring for a child whose school has been closed.
  • An expansion of unemployment benefits.
  • Modifications to the USDA nutrition and food assistance programs.
  • New requirements for coronavirus diagnostic testing.
  • A temporary increase in the Medicaid federal medical assistance percentage (FMAP).

What does it mean for small businesses?

The FFCRA affects small businesses in two key ways:

  • Paid sick and family leave. The law requires all private businesses with fewer than 500 employees to provide emergency paid sick or family leave for employees affected by the coronavirus pandemic.
  • Employer tax credits. The law provides employers with fewer than 500 employees with refundable payroll tax credits to cover the cost of providing paid sick leave and paid FMLA leave to their employees. Specifically, the law states that:
    • Employers will receive a 100% tax credit against their payroll tax liability up to the capped amount of benefits they must pay.
    • Health insurance costs are also included in the credit.
    • Self-employed individuals receive an equivalent credit.
    • If an employer is owed more than the capped amount and a refund is owed, the IRS will send the refund as quickly as possible.
    • Reimbursement will be quick and easy to obtain.

Where can I learn more?

Read our full story on the Families First Coronavirus Response Act here.

Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

What is it?

The CARES Act, which was signed into law on March 27, offers multiple ways to help small businesses survive and recover from losses suffered during the coronavirus pandemic. Key components of the CARES Act include a loan program from the SBA, changes to unemployment benefits and changes to business tax filing requirements.

What does it mean for small businesses?

  • Paycheck Protection Program (PPP): This lending program allows businesses to borrow money to cover monthly payroll costs for businesses for up to 2.5 months. If used for payroll, mortgage interest or other qualified expenses, these PPP loans can be forgiven as long as the employer continues to employ or rehire workers and follow other criteria.
  • Business tax provisions: Employers can defer payment of the employer share payroll taxes.
  • Unemployment assistance: If your business was closed because of coronavirus and employees could not work from home, or your employees are unable to work due to illness or the need to take care of someone who is ill with the virus, they can collect unemployment.
  • Payments for individuals: Those who make less than $75,000 a year received direct payments of $1,200 per individual ($2,400 joint return) plus $500 per child.

Where can I learn more?

  • The Small Business Administration’s Coronavirus Relief Options.
  • More info on IRS tax changes can be found here.
  • More information on filing for unemployment assistance can be found at the U.S. Department of Labor, though you or your employees must file for benefits through your state’s unemployment program.

Read our full story on the CARES Act here.

Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA)

What is it?

The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) — which was signed into law on December 27, 2020, as part of a larger government appropriations bill — provides more assistance to individuals and businesses harmed by the impact of the coronavirus pandemic. The CRRSAA provides direct payments to individuals, revises key aspects of the CARES Act to provide more flexibility to businesses and offers enhanced federal unemployment benefits.

What does it mean for small businesses?

Among many provisions, the CRRSAA includes:

  • Reopening and revisions for the Paycheck Protection Program: The PPP has been reopened so more businesses can apply for the first time, and some companies can apply for a “second-draw” PPP loan. On top of this, the bill expands what types of expenses can be paid for with PPP funds and makes forgiveness easier to obtain for businesses that took out loans worth less than $150,000. Applications for new and second-draw PPP loans are open until March 31, 2021, or until funds are exhausted.
  • Changes to business taxes: The CRRSAA makes PPP loans non-taxable and ensures that the majority of business expenses paid for with PPP loans are also not taxable. The legislation also makes businesses eligible to receive both PPP loans and the Employee Retention Tax Credit (ERTC), whereas they were not eligible under the original CARES Act.
  • Reopening of the EIDL grant program: The bill allocates more money for the Economic Injury Disaster Loan (EIDL) grant program that had been expanded in the CARES Act. This will allow some businesses to receive up to $10,000 in EIDL grants.
  • New grant program for live venues: The bill allocates $15 billion in grants for small venues like independent movie theaters and concert halls that have been financially harmed by the pandemic, with grants maxing out at $10 million. Grants must be used on expenses such as payroll, rent, utilities and personal protective equipment.
  • Enhanced federal unemployment benefits: The bill extends the amount of time people can collect federal unemployment benefits (pandemic unemployment assistance), and it restarts a supplemental federal benefit on top of state benefits. The extra benefit totals $300 per week and lasts through March 14, 2021.
  • Payments for individuals: Those who make less than $75,000 a year will receive direct payments of $600 per individual ($1,200 per joint return for couples making less than $150,000 annually) plus $600 per child.

Where can I learn more?

For more resources from the U.S. Chamber of Commerce:

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Published February 22, 2021