What does President Biden’s 1.9T Stimulus Bill Mean for my Small Business?
The massive $1.9 trillion stimulus bill has now passed and been signed into law. The stimulus checks and direct deposits are getting to individuals and families. Few people, even in government, have read the entire contents, as it is a gigantic pile of paper. There are some inclusions targeted directly at small businessesi.
Restaurants – $29 billion is allocated to bars and restaurants, some of the hardest hit businesses due to lockdowns. These are loans that do not require repayment. Some restaurants can get as much as $10 million, with restaurant chains with more than 20 locations excluded to better target smaller businesses.
Live event venues – theaters, concerts, and other live event venues were for the most part shut down for the past year, and the bill allocates $1.25 billion to these businesses.
EIDL program – The Economic Injury Disaster Loan program that was part of the CARES Act gets a $15 billion infusion from this bill. The payouts were capped at $10,000 but were popular because there were fewer rules to qualify.
State administered relief – $10 billion is going to the states for affordable loan programs. Specific rules and program details are determined by the states, so check yours.
Employee retention tax credits – Employee retention tax credits are being extended. Businesses started before February 15, 2020 could receive $7,000 per quarter ($28,000/year) in tax credits if their annual sales were less than $1 million. This bill extends this funding to businesses that started up after the beginning of the pandemic.
PPP – The Paycheck Protection Program still has $120 billion unspent but is set to expire the end of March 2021. There is a bipartisan effort underway in Congress to get it extended for three months.
Stephen Gandel, CBS MoneyWatch Senior Reporter, has this advice for small business ownersii: “Well, as we said, there’s some generous portions of it, but there’s not a lot. So you should move quickly. You should talk to your advisors, talk to your accountants, talk to your payroll processors so you get your numbers in order.
For minority small businesses, there is going to be a window in the first two weeks where they have priority. So, especially if you’re a minority-owned business, you should move. But anyone should again talk to their advisors because there’s some generous benefits in this new plan, but it’s not– and it’s a pot of money for small businesses, but it’s not a huge pot of money for small businesses.”
Special for Marijuana-Related Businesses
If your business is marijuana related, there are three parts of the bill just for youiii.
- State Small Business Credit Initiative – $10 billion allocated to states for small and disadvantaged businesses could be used to help marijuana-related businesses. Because the funds go to states for their programs, experts believe that state legality would allow help for marijuana-related businesses.
- Employee Retention Credit – Requirements for these credits have been relaxed and experts say they could be used to help cannabis-related firms that have experienced a year-to-year drop in receipts of 20% or more (previously 50%).
- Payroll protection loans and grants – Though requirements have not changed for these loans and grants, experts note that banks issue the loans and grants, so they decide which businesses qualify.
No matter what your business (legal that is), you should be able to find some help, but heed the advice of Mr. Gandel above and act quickly.