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pandemic relief

Restaurants, event venues, and other small businesses impacted by shutdowns have the opportunity to tap into some powerful pandemic relief programs offered by the federal government. The first quarter of 2021 saw lots of changes to COVID-related economic stimulus programs. Below are some of the most significant changes including additional relief designed to help support small businesses.

Restaurant Revitalization Program

The Restaurant Revitalization Program is now taking applications. The $28.6 billion Restaurant Revitalization Fund (RRF) is intended to aid the hardest-hit restaurants, bring back jobs, and reviving the industry. The RRF will provide restaurants with funding equal to their pandemic-related revenue loss, up to $10 million per business and no more than $5 million per physical location. Those that receive funding are not required to repay the money as long as the funds are used for eligible expenses no later than March 11, 2023. Eligible expenses include payroll costs, payments on any business mortgage or rent, utilities, maintenance, construction of outdoor seating, supplies, and food and beverage expenses (you can find the full list here).

The SBA is partnering with point-of-sale services providers Clover, NCR Corporation, Square, and Toast to provide a customer-centric approach to delivering the pandemic relief funds from the RRF program. The partnership will help leverage technology to better reach the smallest businesses allowing business owners to access the RRF application or data they need to fill out the application directly through their POS provider. Our cloud accounting division, GCT, can offer guidance and assistance with this process.

Shuttered Venue Operators Grants Program

The Shuttered Venue Operators Grants program supports museums, concert halls, and other live entertainment venues that were forced to close due to the COVID-19 restrictions, providing $16 billion in grants. Eligible venues may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. Venues are able to apply for both the Shuttered Venue Operators Grant and the PPP loan. Under the most recent act, any PPP funds a business receives will be deducted from the grant amount under the Shuttered Venue Operators program. The grant funds can be used for payroll, rent, PPE, state and local taxes and fees, utilities, and mortgage payments.

Applications are now being accepted, and the SBA has begun sending out notices of grant awards. The first 59 days are reserved for venues with no more than 50 employees, with no less than $2 billion of funding set aside. You can view the SBA priority schedule on the SBA website

Pandemic Relief EIDL Loans

The SBA Economic Injury Disaster Loan Program was designed to provide emergency economic relief to small businesses and nonprofits experiencing a temporary loss of revenue due to the pandemic. The application deadline has been extended to Dec. 31, 2021, and now includes agricultural businesses with 500 or fewer employees.

Loans approved prior to April 7, 2021, for less than $500,000, are likely eligible for an increase based on new loan maximum amounts announced March 24, 2021. The funds can be used for working capital and normal operating expenses. These loans must be repaid, but they offer lucrative terms.

Targeted EIDL Advance

The Targeted Advance funds are specifically designed for businesses in low-income communities. Advance funds of up to $10,000 will be available for those businesses that previously received an EIDL Advance for less than $10,000, or never received funds due to lack of program funding. 

The SBA will be reaching out to those who qualify for additional relief; no action is necessary from the applicants. You may qualify if you meet the below criteria:

  • Are in a low-income community.
  • Can demonstrate more than 30% reduction in revenue
  • Have 300 or fewer employees (including businesses that traditionally would not be eligible, including sole proprietors, independent contractors, and private nonprofit organizations)

Supplemental Targeted Advance for Small Businesses

The SBA has officially begun doling out an additional $5 billion in funds as a part of the Supplemental Targeted Advance Program. The program will aid small businesses hit hardest by the pandemic, specifically focusing on the smallest and minority-owned businesses.

Completing the Targeted EIDL Advance application is a requirement to be considered for the Supplemental Targeted Advance; the SBA will be contacting small businesses that meet the following criteria:

  • Located in a low-income community
  • Able to prove 50% or more in economic losses during any eight-week period beginning on March 2, 2020, or later, compared to the same time in 2019
  • 10 or fewer employees

Businesses will be eligible even if they received $10,000 in its other grant programs, the EIDL Advance from March and April of 2020, or its successor program, the Targeted EIDL Advance.

Employee Retention Tax Credit

The IRS has once again released a new set of guidelines as of April 2, 2021, for those businesses that have utilized, and plan to utilize, the Employee Retention Credit. The new guidelines have opened up opportunities and clarification for business owners. 

Some changes include:

  • Increase in the maximum credit amount
  • Expansion of the category of employers that may be eligible to claim the credit
  • Revisions to the definition of qualified wages
  • New restrictions on the ability of eligible employers to request an advance payment of the credit

One notable aspect affects eligibility for the credits under the significant decline in gross receipts criteria. The change allows employers to use an alternative quarter—specifically the preceding quarter—to calculate gross receipts.

The changes apply to the first and second quarters of 2021 and are limited to employers with 500 or fewer full-time employees. 

Community Navigator Pilot Program

Previous rounds of economic relief helped thousands of small businesses stay afloat, yet too many small businesses were left behind. In an effort to close that gap, the SBA has launched the Community Navigator Pilot Program. This program will work with community organizations that have deep roots in the community, strengthening the outreach to underserved businesses.

These grants grant awards will range from $1 million to $5 million for a two-year performance period. Applicants have until July 12, 2021, to submit their applications at grants.gov. For more information visit the SBA website.

 

We recommend consulting your tax advisor to discuss how these program changes may affect your business, ensuring you are taking full advantage of the loans, grants, and credits.

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