The American Rescue Plan Act Small Business Provisions



The third round of federal economic stimulus or the American Rescue Plan Act (ARPA) of 2021 contains a wealth of new funding to small business relief programs new and old. MICPA board member and chief growth officer at Sequoia Financial Group Leon LaBrecque, JD, CPA, CFP, CFA, breaks down the many provisions of ARPA that could have a direct, positive impact to small business clients.

Payroll Protection Program

1. First and Second Draw Loans
  • Scheduled to end on March 31 – House and Senate have proposed legislation to extend until May 31, 2021, with the U.S. Small Business Administration (SBA) directed to process applications through June 30, 2021. 
  • ARPA added $7.25B to the Paycheck Protection Program (PPP) which increased total funding to $291.65 billion.
  • The act also added additional nonprofits that qualify including 501(c)(5) labor and agricultural organizations and allows those that were waiting on the Shuttered Venue Operators Grant (SVOG) program to apply as well. 
  • SBA has received around $176 billion in applications and issued $165 billion in loans to date for 2021 PPP loans. 
  • Validation error codes are still affecting about 20% of applications. 
  • Schedule C businesses – Rules have changed to allow for those that have not received a loan yet to apply using gross income vs net income. 

NOTE: The $100,000 annual limit is still in place ($20,833 maximum). Discussions are taking place on this being retroactive. 

2. Loan Forgiveness

  • 2020 PPP loans – To date, $168.6 billion of $521.1 billion in PPP loans have been forgiven.
  • Of the loans that have been processed, 99.7% have been forgiven.
  • There are $87.1 billion in loans currently in process, $61 billion of which are for more than $1 million.
  • Loans over $2 million that have an increased review requirement are not moving. The 90-day turnaround is being ignored with no communication.
  • If your client or prospects have loans over $2 million, they should consider engaging for a review of their forgiveness application and necessary documentation before filing.
  • If you plan on filing an application for PPP2 before it ends and have not yet filed for forgiveness, you should hold off if you can as this could cause additional delays.
  • Guidance has been issued by the IRS for PPP interaction with the Employee Retention Credit (ERC).
Shuttered Venue Operators Grant Program (SVOG)
  1. Created under the Economic Aid Act on Dec. 27, 2021, this program also falls under purview of the SBA. 
  2. Allows qualifying businesses to receive grants for 45% of their gross earned revenue up to $10 million.
  3. Applications for this program are currently slated to begin acceptance in early April.
  4. ARPA added $1.25 billion to the $15 billion already funded.
  5. Those holding out for the SVOG can now apply for a PPP loan due to the aforementioned delay. 
Restaurant Revitalization Grants
  1. A new $28.6 billion program established this week under ARPA to be administered by the SBA similar to the SVOG.
  2. Eligible entities include any restaurant, food truck, food stand, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room or taproom with less than 20 locations that has not received a grant under SVOG and is not a public company.
  3. Grants are limited to $5 million per physical location and shall not exceed $10 million in total for eligible entities and affiliates. 
  4. These grants will not be taxable, and expenses will be deductible similarly to PPP forgiveness. 

Source: MICPA

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