What the US bailout means for small businesses

My oh my! Since the passage of the American Rescue Plan went into effect By President Joe Biden on March 11, there are a lot of new benefits and government support for small businesses.

Changes have been made to the Paycheque Protection Program (P3) and new funds have been made available to restaurants and businesses that offer live entertainment.

More money for the self-employed

The PPP enabled small businesses and the self-employed to obtain a forgivable loan – in other words, a loan that could easily turn into a grant. But the amount you could get was quite limited if you were self-employed or on-demand.

If you’re a sole proprietor who files a Schedule C on your federal income tax return – and you qualify for a first or second P3 loan and haven’t applied – you may get a higher amount.

You can calculate the maximum amount of your loan based on your gross income instead of the bottom line of your Schedule C. (Line 7 of your Schedule C instead of line 31.) This means – in almost all cases – that you can get more money.

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Let’s say you are a driver for a transportation service and you “earn” $ 20,000 per year. It’s your gross income. But you deduct all kinds of expenses – your gasoline, your car, the little bottles of water you have for cyclists. When you deduct all of that, the bottom line on your Schedule C is $ 10,000. Prior to this change, you could only apply for a PPP based on $ 10,000. You could now apply based on $ 20,000.

What if you’ve ever applied for – and received – a P3 loan using only net income? Can you go back and get the higher amount? No. This change is not retroactive, although many are pushing for it to be retroactive.

Paycheque Protection Program Deadline Extended

The deadline for applying to the PPP has been extended. March 30 – down to the wire – the the deadline has been extended for your first, second or both to May 31. If you haven’t applied for your first PPP loan or your second PPP loan, you still can.

Second PPP loans can happen faster

If you’ve recently applied for your first P3 Random Sweepstake Loan, you may have been frustrated to learn that you have to wait until the end of your first P3 loan forgiveness period – at least eight weeks – to apply for your second. This no longer appears to be the case.

Grants for closed sites available

After a long wait, the The Small Business Administration is set to open apps on Thursday for a new program offering grants – not loans – to living room businesses forced to close during the COVID-19 pandemic. These included cinemas, museums and representatives of the performing arts.

Grants are available for up to 45% of your gross earned income in 2019 and you can apply for up to $ 10 million. The $ 2 billion has been set aside for smallholders with up to 50 full-time employees. You can find more information here.

Restaurant help

Restaurants and bars were among the hardest hit businesses last year. There is help in the form of grants, not loans. The Restaurant Revitalization Fund (RRF), which is part of the American Rescue Plan, provides a total of $ 28.6 billion in grants to restaurants and bars from 1 to 20 locations. You can get up to $ 5 million per location, up to a total of $ 10 million. The amount is determined by subtracting 2020 sales from 2019 revenue.

All types of dining establishments are eligible, including restaurants, bars, food trucks, caterers, tasting rooms, breweries, etc. There is good news for small businesses: $ 5 billion is earmarked for establishments with gross revenues of no more than $ 500,000 in 2019.

You will apply through the SBA, but applications are not yet open.

And there’s more

There are changes in the Employee Retention Tax Credit, changes in the EIDL (Economic Disaster Loan) and other programs for small businesses.

There is so much to cover – I couldn’t do it all here – so email me at [email protected], and I will send you details and updates on these government and future aid available to you.

Rhonda Abrams has been named “Top 30 Global Guru” for startups. Connect with Rhonda on Facebook, Instagram and Twitter. Sign up for Rhonda’s free business advice newsletter at www.PlanningShop.com.

The opinions and opinions expressed in this column are those of the author and do not necessarily reflect those of USA TODAY.

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