Here are the new government efforts to help small businesses

My oh my! Since the passage of the American Rescue Plan signed into law by President Joe Biden on March 11, there are lots of new benefits and government support for small businesses.

There have been changes to the Paycheck Protection Program (PPP) and new funds made available for restaurants and companies that are in the business of providing live performances or experiences.

More money for the self-employed

The PPP enabled small businesses and the self-employed to get a forgivable loan – in other words, a loan that could easily turn into a grant. But it was pretty limited on how much you could get if you were self-employed or a gig worker.

If you are a sole proprietor who files a Schedule C on your federal income tax return – and you qualify for a first or second PPP loan and haven’t applied – you now can now get a larger amount.

You can now calculate your maximum loan amount based on your gross income, instead of the bottom line of your Schedule C. (In other words, Line 7 of your schedule C instead of Line 31.) This means – in almost every case – that you can get more money.

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Let’s say you are a driver for a ride service, and you “make” $20,000 a year. That’s your gross income. But, of course, you deduct all kinds of expenses – your gas, your car expenses, the little bottles of water you have for riders. By the time you deduct all that, the bottom line of your schedule C is only $10,000. Before this change, you could only apply for a PPP based on $10,000 – now you’d be able to apply based on $20,000.

What if you’ve already applied for – and received – a PPP loan using only net income? Can you go back and get the higher amount? No. This change isn’t retroactive, though many are lobbying to have it made retroactive.   

Paycheck Protection Program deadline extended

The deadline to apply for the PPP has been extended. On March 30 – right down to the wire – the deadline was extended for your first or second or both to May 31. So if you didn’t apply for your first PPP loan or your second PPP loan, you still can.

PPP second loans can happen faster

If you only recently applied for your first draw PPP loan, you might have been frustrated by being told you had to wait until your first PPP loan forgiveness period was up – at least eight weeks – to apply for your second. That appears to no longer be the case.

President Joe Biden stopped by Washington, DC's oldest hardware store Tuesday which benefitted from a Paycheck Protection Program loan after the administration's two-week rule changes which gave preference to smaller “mom-and-pop” businesses. (March 9)

AP Domestic

Shuttered venue grants now available

After a long wait, the Small Business Administration is set to open applications on April 8 for a brand new program offering grants – not loans – to live venue businesses that were forced to shut due to the COVID-19 pandemic. These included movie theaters, live entertainment, museums, performing arts and also talent representatives.

Grants are available for up to 45% of your 2019 gross earned revenue, and you can apply for up to $10 million. The amount of $2 billion has been reserved just for small operators with up to 50 full-time employees. You can find more information here.

Restaurant help

Restaurants and bars were among the hardest hit businesses last year. Now there’s help in the form of grants, not loans. The Restaurant Revitalization Fund (RRF), part of the American Rescue Plan, provides a total of $28.6 billion in grants to restaurants and bars with 1-20 locations. You can get up to $5 million per location, up to a total of $10 million. The amount is determined by subtracting 2020 sales from 2019 revenues.

All kinds of food and drink establishments are eligible, including restaurants, bars, food trucks, caterers, tasting rooms, brewpubs and so on. And there’s good news for smaller businesses: $5 billion is set aside for establishments with $500,000 or less in gross receipts in 2019.

You will apply through the SBA, but applications are not yet open. 

And there’s more

There are changes in the Employee Retention Tax Credit, changes in EIDL (Economic Injury Disaster Loan), and other small business programs.

There’s so much to cover – I couldn’t do it all here – so email me at [email protected] and I’ll send you details and updates on these and future government help available to you.

Rhonda Abrams’ newest book “The Sh*t’s Hit the Fan: Now What, 99 Recession-Proof Tips for Small Business Success” has just been released. Rhonda was named a “Top 30 Global Guru” for Startups. Connect with Rhonda on Facebook, Instagram and Twitter. Register for Rhonda’s free business tips newsletter at www.PlanningShop.com.

The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.

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