Although the overall attitude of the country seems to be more optimistic as the vaccine rolls out and restrictions are lifted, it will take significant time for the economy to fully recover. The bad news is that many businesses and not-for-profit organizations are still struggling to stay afloat. But, the good news is that help is available – several loan and grant options are offered through the SBA, with many recent changes being made to benefit borrowers. An overview of these programs is below.
PPP Loan Extension
The PPP Extension Act of 2021, signed just a few days before the original deadline was set to expire, extends the PPP application window from March 31 to May 31, 2021. Additionally, the Act provides an extra 30 days (through the end of June) for the Small Business Association (SBA) to finish processing applications received by the May 31, 2021 deadline, which will provide more time for loans to be granted. (see related post)
Though the deadline was extended by 60 days, no additional funds were allocated to the program. At the current rate of granted loans, the available funding is not expected to last until the new deadline. Borrowers should process applications as soon as possible.
Visit the SBA’s PPP website for links to applications and other important information.
EIDL Program
The SBA recently announced that it is increasing the maximum amount small businesses and non-profit organizations can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program. Starting the week of April 6, 2021, the SBA is raising the loan limit for the COVID-19 EIDL program from six months of economic injury with a maximum loan amount of $150,000, to up to 24 months of economic injury with a maximum loan amount of $500,000. There are also plans to further increase this maximum to $2 million, however, no timetable or details have been released.
Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time. The SBA will reach out directly via email and provide more details about how businesses can request an increase. Any new loan applications and any loans in process when the new limits are implemented will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.
This new relief builds on SBA’s previous announcement that the agency would extend deferment periods for all disaster loans, including COVID-19 EIDLs, until 2022 to offer more time for businesses to build back. In order to shift all EIDL payments to 2022, the SBA will extend the first payment due date for disaster loans made in 2020 to 24 months from the date of the note, and to 18 months from the date of the note for all loans made in the calendar year 2021.
Visit the SBA’s EIDL website for links to applications and other important information.
SVOG Program
The SBA has also said it will launch its long-awaited shuttered venue operators grant (SVOG) program on April 8, 2021. The SVOG program will provide a much-needed lifeline for live venues, museums, movie theatres and many more that have been negatively impacted by the COVID-19 pandemic. (see related post)
To prepare for the opening of the SVOG application portal, applicants should register with the government through the System of Award Management (SAM). More details about eligibility requirements, along with an application checklist and program FAQs, can be found on the dedicated SVOG website. A recording of an informational webinar presented by the SBA can be viewed here.
The SBA also clarified that a taxpayer may receive a SVO grant if it previously received a PPP loan, but the grant will be reduced by all PPP loans received after December 27, 2020. However, after being approved for an SVO grant, the borrower cannot take a PPP loan. Click here for more details about cross-program eligibility and restrictions.
Restaurant Revitalization Fund
The American Rescue Plan Act of 2021, enacted in early March, also authorized $28.6 billion for another program to provide assistance for bars and restaurants. Under the Restaurant Revitalization Fund (RRF), restaurants can apply for cash grants of up to $10 million based on lost revenue. $5 billion of the total amount has been set aside for businesses that made less than $500,000 in 2019 revenue.) Grant funds will not be taxed like income.
No official timeline has been released for the RRF, though a phased launch is expected in April. More guidance will be forthcoming from the SBA. To prepare to apply for the grants, restaurants should begin gathering their financial information and register with the government through the System of Award Management (SAM). Click here for an overview of the program and a guide to common questions provided by the U.S. Chamber of Commerce.
Pennsylvania’s COVID-19 Hospitality Industry Recovery Program (CHIRP) opened for applications on March 15, 2021. (see related post)
SBA Cross-Program Eligibility
Borrowers can apply for funds from multiple SBA programs. Click here for more information about eligibility and restrictions.
Related Posts:
PPP Loan Deadline Extended to May 31
Relief Program for Shuttered Venue Operators to Open April 8
