The SBA (Small Business Administration) isn’t planning another round of PPP (Paycheck Protection Program) loans. Still, other programs are available to help your business recoup revenue lost during the COVID-19 pandemic.
As part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act passed in Mar. 2020, PPP loans were meant to provide needed relief to businesses faced with shutdowns during the pandemic. The loan program intended to help businesses continue to pay their employees, even if they had to shut their doors.
After administering over $798 million in loans to over 8.5 million small businesses across the country, the PPP loan program ended on May 31. The program was running out of government funds before then.
There were two “draws” from the PPP loan program, and some businesses that were approved for the second draw are still waiting to receive funds. The SBA says those loans will continue to be funded.
Businesses can replace lost revenue through other programs
If you applied for a PPP loan after the May 31 cutoff date or missed the boat completely, other programs are available to businesses hurt during the pandemic.
Shuttered Venue Operators Grant (SVOG)
After the PPP loan program ended, the SBA reopened its SVOG (Shuttered Venue Operators Grant) program, which has over $16 billion in grants available for “shuttered venues.” Shuttered venues include theaters, music venues, and other similar businesses. The program has $2 billion in reserves specifically for venues with up to 50 full-time employees. SVOG grants equal to 45 percent of a business’s gross earned revenue, up to a maximum of $10 million, are available for eligible applicants.
Restaurant Revitalization Fund
Restaurants and bars were the hardest hit during the pandemic, and the SBA’s Restaurant Revitalization Fund was created specifically to address the industry. Restaurants, bars, and other qualifying businesses can receive funding equal to their pandemic-related lost revenue up to $10 million per business or $5 million per location. Recipients have up to Mar.11, 2023, to use the funds, and they don’t have to pay the money back as long as they use it for eligible purposes.
COVID-19 Economic Injury Disaster Loans
Small businesses and non-profits that lost revenue due to the pandemic may also be able to get some help through the SBA’s COVID-19 Economic Injury Disaster Loan program. Businesses can receive up to 24 months of relief and a maximum loan of $500,000. Unlike the PPP loans, which can be forgiven for eligible borrowers, these loans must be repaid within 30 years, and they have fixed interest rates of 3.75 percent for businesses and 2.75 percent for non-profits.
Employee Retention Credit
The CARES Act also included an Employee Retention Credit program to benefit businesses that kept their employees. The program was expanded in president Joe Biden’s American Rescue Plan. Under the program, eligible employers can receive tax credits against the employer share of Social Security tax equal to 75 percent of the qualified wages they pay to employees from Dec. 31, 2020, through Jun. 30, 2021, up to $10,000 per employee per quarter.