What’s in the $ 1.9 trillion rescue plan for small businesses

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It authorizes another $ 7.25 billion for the Wage Protection Program, which provides unforgivable loans to small businesses and other organizations injured by the pandemic. Loans will only be forgiven if at least 60% of the money is used to support salary expenses, and the rest goes to mortgage interest, rent, utilities, personal protective equipment or other business expenses.

The additional money is intended to extend loan eligibility to include more nonprofits than were previously eligible, as well as digital news services that provide local news and public health guidance during the pandemic.

Despite the added funds, however, the legislation does not extend the program, which will currently expire on 31 March.

This is a problem because there are already a number of applications awaiting approval by the Small Business Administration. And, under current rules, any loan that was not approved by March 31 will not be funded.

This means that banks have to decide how much they want to accept new applications, as it now takes 24 to 48 hours for a bank to receive information from the SBA about approving a loan application.

In cases where applications have not been approved, the SBA may request more information or flags a business owner as ineligible. Eliminating these problems can take several days or weeks.

Bank of America, for example, stopped accepting new applications on Tuesday. “Being the largest creditor in the program since it began, we have 30,000 applications in process and we want to allow enough time to complete the work and get each client’s application through the SBA process by March 31,” a bank spokesman said. in an email to CNN Business.

Banks, the American CPA Institute and others have asked Congress to extend the program after March 31 or at least allow the SBA to continue processing loan approvals for applications submitted before March 31.

As of March 7, the SBA has granted $ 7.6 million in PPP loans totaling $ 678.4 billion since Congress created the program last spring, according to the federal agency.

More money for restaurants, location operators and minority-owned businesses

Other provisions in the American Rescue Plan to help small businesses include:

Money to help states help their small business economies: Through the State Small Business Credit Initiative, the legislation allocates $ 10 billion to state governments to help capitalize on private capital and make low-interest loans and other investments to help their small businesses save money. come back.
More money for disadvantaged companies: The legislation allocates $ 15 billion to the Economic Disaster Loan Grant Program, which is to be given to small businesses in disadvantaged areas, especially those owned by minorities.

Special relief for restaurants: The US rescue plan includes nearly $ 29 billion to create a grant program to provide direct aid to restaurants.

Amid delays, small businesses are desperately waiting for PPP loans
More money for closed place operators: Another $ 15 billion will be added to the grant program for closed space operators, created through the previous economic aid package. The grants are intended to help those who run museums, theater, concerts and other places that have had to close due to Covid restrictions. The bill also allows these operators to apply for PPP loans in addition to these subsidies.

Additional funding for small business management: To help the SBA manage all the new programs that have come under its influence as a result of the pandemic, the bill allocates another $ 1.325 billion to its budget.

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