ARPA - Stimulus Changes for Businesses


Happy Wednesday everyone. Today we will do a review of the changes from the America Rescue Plan Act of 2021 (ARPA) bill that was just signed into law. Happy reading! PPP This bill provides an additional $7 billion in Paycheck Protection Program (PPP) funding and expands eligibility for PPP loans to a wider sphere of nonprofit entities and internet publishing organizations. Currently the PPP program ends on March 31. However, there is a bill that has bipartisan support to extend the PPP application deadline to May 31. This change is not law yet so please check with your lender on their deadlines for applications. EIDL The ARPA also provides for an additional $15 billion in funding for targeted Economic Injury Disaster Loan (EIDL) advances. One-third of this EIDL funding is earmarked for businesses that suffered a revenue loss of greater than 50 percent and employ fewer than 10 people. Employee Retention Credit (ERC) The expanded ERC provisions under the 2021 Consolidated Appropriations Act (CAA), set to expire on July 1, have been extended through December 31, 2021, for eligible employers. 2 new categories of businesses eligible for ERC were created: Startup businesses established after February 15, 2020, with annual gross receipts of up to $1 million and that otherwise do not meet the ERC eligibility tests would now be eligible for the ERC. The startup ERC is capped at $50,000 per quarter, per employer, and the credit would be computed under the regular ERC rules. Severely financially distressed employers, which is defined as an employer that experienced a gross receipts reduction of more than 90 percent as compared to the same quarter in 2019. If an employer meets this definition, it may treat all wages paid to employees as qualified wages, regardless of the number of full-time employees. The amendments to the ERC made by the ARPA are effective for calendar quarters after June 30, 2021. Families First Coronavirus Response Act (FFCRA) Paid Leave Credits The paid sick and expanded Family and Medical Leave Act voluntary credits made available under the FFCRA set to expire on March 31 have been extended through September 30, 2021. The ARPA makes several changes to the credits for wages paid between April 1, 2021, and September 30, 2021, including increasing eligible wages to $12,000 per employee (up from $10,000 in 2020), expanding types of leave to include vaccination, and covering as many as 60 days of paid family leave for self-employed individuals (instead of 50 days under previous law).

Shuttered Venue Operators Grants The ARPA provides an additional $1.25 billion to the shuttered venue operators grant program. ARPA also removed the requirements that prohibited an entity from both receiving a PPP loan and being eligible for a shuttered venue operators grant. Instead, the amount of the grant will be reduced by the PPP loan amount received after December 27, 2020. Restaurant Grants The ARPA establishes a $25 billion Restaurant Revitalization Fund for 2021 to be administered by the U.S. Small Business Administration (SBA). Of this funding, $5 billion is allocated to restaurants whose gross receipts in 2019 were less than $500,000, and the first 21 days of the program prioritizes small businesses owned by women, veterans, or socially and economically disadvantaged individuals. Eligible entities include restaurants, food trucks, bars, caterers, taprooms, and other similar places of business in which the public or patrons assemble for the primary purpose of being served food or drinks.