Supporting Small Businesses
This page will be updated continuously to reflect the most recent information. This page was last updated on February 24, 2021.
On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (“COVID relief law”) was signed into law – providing additional relief to small businesses and their employees struggling as a result of the COVID-19 pandemic. Updated information on available resources is below.
Update: Congress refreshed this program in the COVID relief law, and new loans will soon be available until March 31, 2021. The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a new Small Business Administration (SBA) loan program, called the “Paycheck Protection Program” (PPP). The Paycheck Protection Program provides small businesses with zero-fee loans of up to $10 million to cover payroll and other operating expenses. They can seek forgiveness for PPP funds spent on eligible payroll and overhead costs, such as rent, mortgage interest payments, and utility costs. Small businesses must spend at least 60 percent of the funds on payroll costs and no more than 40 percent on eligible overhead costs. The COVID relief law also clarifies that tax deductions are allowed for any otherwise deductible expenses paid with the proceeds of a forgiven PPP loan.
The COVID relief law enables businesses that have already received a PPP loan to apply for a second forgivable loan of up to $2 million. New categories of expenses now qualify for forgiveness, and Congress extended PPP eligibility to additional types of businesses and nonprofits. Please click the link above for more information.
Update: Congress refreshed the EIDL emergency advance program in the COVID relief law, and emergency grants for eligible small businesses will soon be available. The CARES Act expanded eligibility for SBA economic injury disaster loans (EIDLs). EIDLs are loans up to $2 million with interest rates of 3.75% for businesses and 2.75% for nonprofits. The CARES Act also established an EIDL emergency grant program, which allows loan applicants to request an advance of up to $10,000 to keep employees on payroll, pay for sick leave, or otherwise pay business obligations. These emergency advance grants do not need to be repaid.
The EIDL emergency advance program was closed to new applicants over the summer after the SBA ran out of funding. The COVID relief law allocates an additional $20 billion of targeted funding for the emergency advance grants, which will allow SBA to resume the program. However, the law also restricts eligibility to qualified applicants located in low-income communities. For more information on EIDL emergency advances and to see whether your business is eligible to apply, please click the link above.
The COVID relief law provides $15 billion nationwide to a new SBA grant program for live venues impacted by the public health crisis. Eligible grant recipients include live venue operators, promoters or theatrical producers, independent movie theatre operators, museum operators, and talent representatives. Of the total amount, $2 billion is set aside for eligible entities that employ fewer than 50 full-time employees. Grants are awarded by the SBA, which will make application information available as soon as possible. Check back for updates and click the link above for more information on the new program.
Update: In the COVID relief law, Congress extended and made enhancements to the employee retention tax credit. The CARES Act created a refundable payroll tax credit for businesses and nonprofits that retain their employees during the COVID-19 crisis. Please click the link above for more information on important updates to the credit included in the COVID relief law, including a larger credit amount and relaxed eligibility criteria. The COVID relief law also permits certain governmental employers to claim the credit, including state- and local-run colleges and universities and entities whose principal function is providing medical or hospital care.
Update: In the COVID relief law, Congress resumed the payment of principal and interest on small business loans guaranteed by the SBA under the 7(a), 504, and microloan programs. For small businesses that already have an SBA loan (such as a 7(a), 504, or microloan) or took one out within 6 months after the CARES Act was enacted, the SBA will pay all loan costs for borrowers, including principal, interest, and fees, for six-months. SBA borrowers may also seek an extension of the duration of their loan and delay certain reporting requirements.
Information on the programs below will be updated shortly.
Relief for Small Business Government Contractors
If you are a government contractor, there are a number of ways that Congress has provided relief and protection for your business. Agencies will be able to modify terms and conditions of a contract and to reimburse contractors at a billing rate of up to 40 hours per week of any paid leave, including sick leave. The contractors eligible are those whose employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing because of COVID-19. If you need additional assistance, please reach out to your local Small Business Development Center, Women’s Business Center, SCORE chapter, or SBA District Office. You should also work with your agency’s contracting officer, as well as the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU).
Payroll Tax Delay
Update: The COVID relief law extends the repayment period for deferred payroll taxes through December 31, 2021; penalties and interest on deferred unpaid tax liability will not begin to accrue until January 1, 2022. The CARES Act allowed employers to delay paying the employer-portion of payroll taxes through the end of 2020.
The CARES Act allowed the Treasury to send advance payments of tax credits available to employers that are required to provide up to 12 weeks of coronavirus-related paid leave to their employees.
Business Tax Relief
The CARES Act provided other forms of tax relief for businesses, including loosening requirements for net operating losses and limitations on business interest deductions. The CARES Act also permanently fixed the qualified improvement property (QIP) error in the 2017 tax law, so that QIP investments are entitled to 100% recovery over 15 years. Distillers are exempt from excise taxes on undenatured alcohol for the purpose of producing hand sanitizer.
Delay for Single Employer Pension Plans
Single employer pension plans are allowed to delay quarterly contributions for 2020 until the end of the year. Employers may also use 2019 funded status for the purposes of determining funding-based limits on plan benefits for the plan years that include 2020.
For more information about SBA loan programs, please visit the Small Business Administration website. More information about small business programs in the CARES Act and other resources for small businesses can be found on the U.S. Senate Committee on Small Business and Entrepreneurship website.