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

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It authorizes an additional $ 7.25 billion for the Paycheck Protection Program, which provides forgivable loans to small businesses and other organizations affected by the pandemic. However, the loans will only be forgiven if at least 60% of the money is used to support labor costs and the rest goes towards mortgage interest, rent, utilities, personal protective equipment or certain other business expenses.

The extra money is intended to increase your eligibility for the loans eligible nonprofits, as well as digital news services that provide local news and public health guidance during the pandemic.

Despite the additional funding, the legislation does not really extend the program, which is currently expiring on March 31.

That’s a problem because there is already a backlog of applications that have yet to be approved by the Small Business Administration. And under current rules, any loan not approved by March 31 will not be funded.

That means banks must decide how long they want to accept new applications, as it now takes 24 to 48 hours for a bank to hear from the SBA whether a submitted loan application has been approved.

In cases where applications are not approved, the SBA may ask for more information, or mark a business owner as unsuitable. It may take days or weeks longer to resolve these issues.

For example, Bank of America stopped accepting new applications on Tuesday. “As the largest lender in the program since its inception, we have 30,000 pending applications and are committed to giving enough time to complete the work and get each client’s application through the SBA process by March 31,” said a spokesperson for the bank in an email to CNN Business.

Banking associations, the American Institute of CPAs, and others have called on Congress to extend the program beyond March 31, or at least allow the SBA to continue processing loan approvals for applications submitted before March 31 .

On March 7, the SBA has issued 7.6 million PPP loans totaling $ 678.4 billion since Congress launched the program last spring, according to data from the federal agency.

More money for restaurants, site operators and minority businesses

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

Money to help states assist their small business economies: Through the State Small Business Credit Initiative, the legislation allocates $ 10 billion to state governments to help raise private capital and make low-interest loans and other investments to help restore their small business economies.
More money for disadvantaged companies: The legislation earmarks $ 15 billion for the Economic Injury Disaster Loan program, which is awarded to small businesses in disadvantaged areas, particularly minority-owned businesses.

Special lighting for restaurants: The American Rescue Plan includes nearly $ 29 billion to establish a grant program that provides direct assistance to restaurants.

Amid slowdowns, small businesses are desperately waiting for PPP loans
More money for closed site operators: Another $ 15 billion will be added to the Shuttered Venue Operators Grants program created by the previous economic aid package. The grants are designed to help those running museum, theater, concert and other venues that had to be closed due to Covid restrictions. The bill also enables such operators to apply for PPP loans in addition to these subsidies.

Additional Funding for the Small Business Administration: To help the SBA manage all new programs that have fallen under its purview as a result of the pandemic, the bill will allocate an additional $ 1.325 billion to its budget.

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