Important relief on the way for WNC small businesses
We know 2020 has been tremendously challenging for local small businesses, and while our region has worked together like never before, we’ve still been facing a very uncertain and challenging winter.
Well, we’re pleased to be able to share some positive news: the year is almost over; we’ve rounded the solstice so the days are getting longer; two vaccines have been approved and are being distributed; and last night, Congress officially approved a bipartisan $900B COVID-19 relief bill including vital relief for small business most impacted by the pandemic. Is it coincidental that last night also had an historical alignment of Jupiter and Saturn?
Congress passed the bill so it’s headed to the President for signature. Then the appropriate agencies will need to take the bill and create the programs, rules, and guidelines to implement the various provisions. Some really important items like a second round of direct payments, extended unemployment support, and extension of the federal eviction prohibition could go into effect by the end of the year. Most of the small business relief programs are tasked to the US Small Business Administration (SBA) to create and run, and we’re guessing these will start rolling out in early January.
What are the key items for small business?
The COVID-19 relief bill includes essential support for small businesses and nonprofits. Here’s a very quick summary of our highlights.
NOTE: These are based on our first readings of the bill and details are subject to change as the actual programs are created.
- Paycheck Protection Program (PPP) Second Draws: Small businesses that have been highly COVID-19-impacted will be eligible for a second PPP loan. These are still fully forgivable. Businesses will need to have had at least a 25% revenue reduction in any quarter in 2020 compared to 2019. The amount will again be 2.5X average monthly payroll for most business types, but it will be 3.5X for restaurants. If you didn’t get a first PPP loan but need one now, it looks like that will be a possibility as well. Plus, there are some changes that benefit farmers and most 501(c)(6)’s are now eligible. As in previous rounds, Mountain BizWorks will be a PPP lender focused on WNC small businesses and non-profits, and especially for rural, women-led, and/or minority-led enterprises. Stay tuned for details.
- Streamlined PPP Forgiveness for PPP Loans $150,000 and Less: The bill will make the PPP loan forgiveness process even easier for borrowers including not requiring you to provide the detailed expenditure documentation alongside your application (you will still need to keep the records on file). For our existing PPP borrowers that haven’t applied for forgiveness yet: we’ll be providing guidance on this new process once SBA enables it (early January we think).
- Grants for Live Venue Operators, Performing Arts, and Theatres: There’s $15B for a new grants program to be administered by SBA to support our well loved and hugely impacted venues, theatres, performing arts organizations, and the like. This is super encouraging and the grants could be up to 45% of 2019 gross earned revenue. There are a lot of eligibility and other program details SBA will finalize for this new program.
- Grants for Child Care Providers: Our region’s child care operations have been massively impacted by the pandemic and the bill includes $10B in grants to support these important entities.
- EIDL Advance Grants: The bill includes $20B for SBA to continue the EIDL Advance Grants program and this may be targeted towards highly impacted industry sectors.
- Extension of SBA Debt Relief Program: The bill extends this very important but lesser known relief program where SBA will make payments on-behalf of small businesses with eligible SBA guaranteed loans and microloans. To all of our SBA loan clients: we’ll be getting additional specifics out on this relief as soon as we get it from SBA. It looks like this could start in February.
- Emergency Relief for CDFIs: Finally the bill also includes important support for CDFIs like Mountain BizWorks and their communities to be able to continue to help those businesses and communities most impacted or at-risk. This will help us continue to provide timely technical assistance to regional entrepreneurs and funding program flexibility to rebound from the pandemic.
Again, this is not an exhaustive list and we expect some of the details could change between now and the specific programs go live. Mountain BizWorks will continue to share updates on those programs we’re providing or assisting with as additional details are available.
Thank you for everyone’s work to help our local businesses. We are resilient together.