Provided by Kyle Harris, Senior Vice President - Wealth Management, The Harris Gibson Group, UBS Wealth Management USA

President Joe Biden signed the long-awaited $1.9 trillion stimulus bill, known also as the “American Rescue Plan.” The plan includes additional relief for business owners. However the Paycheck Protection Program (PPP) did not get extended and the March 31 deadline for the PPP remains in place. The “American Rescue Plan Act” focuses more on individuals and local governments than business owners. Most notably the bill provides for $1,400 stimulus payments to individuals earning less than $75,000, single parents earnings up to $112,500 and married couples with incomes up to $150,000.

But while only about $50 billion of the overall bill directly supports business owners, support of testing and vaccine development and distribution is critical to helping businesses and the economy open up.

Paycheck Protection Program

Many business owners have been watching for developments on the PPP, which was put in place last March specifically to help businesses struggling due to COVID-19. While the stimulus bill does not extend the PPP past the current March 31 end date, the bill does provide more funding. Under the bill, an additional $7.25 billion will be added to the PPP, which began January with $284.5 billion. Eligibility has also been expanded to include more non-profits.

It remains to be seen if an extension of the PPP past March will come in a future bill. For now, business owners who are considering a loan should assume that lenders will stop taking new applications by late March.

Employee Retention Credit (ERC)

Under the bill, the ERC is being extended until the end of the year. Businesses can now claim the refundable credit equal to as much as $7,000 per employee per quarter during the last half of the year. So, including the existing provision, which is similarly apportioned, employers this year would qualify for up to $28,000 per employee--and if they applied for 2020, the total amount available is $33,000 per employee, according to INC . Eligible employers in 2021 include companies that experienced a full or partial suspension of operations as a result of government mandates, or those that can show at least a 20% reduction in quarterly gross receipts, compared with the same quarter in 2019. Companies eligible for the 2020 credit must show a more than 50% decline in gross receipts, per INC.

Economic Injury Disaster Load Advance Grants

The bill provides $15 billion to small businesses in low-income communities hurt by COVID-19. A portion of this will go to businesses that have no more than 300 employees and have suffered a gross loss of more than 30% over an 8-week period from March 2 to the end of this year. Such businesses would be eligible for up to $10,000. A second portion will go to businesses that have had losses of 50% and have fewer than 10 employees, and a third for those that have had losses of between 30-50% and have fewer than 10 employees. The Small Business Administration (SBA) will provide $5,000 grants to each of these eligible companies, while funds last.

Grants for food service businesses

Through the bill, $28.6 billion is earmarked for grants for food services businesses such as bars, restaurants, and caterers. The grants would be equal to the difference between a business' gross receipts in 2019 and gross receipts in 2020. If the business has fewer than 20 locations, it can get a grant of up to $5 million per location, up to $10 million in total. The grant program will be managed directly by the SBA rather than through lenders.

Grants for live venue operators

The Act adds an additional $1.25 billion for live venue operators such as museums, theaters and other in-person events-related entities. The grants are equal to the lesser of 45% of the venue's gross revenue in 2019 or $10 million. The grant program was initially approved by the Economic Aid Act in December 2020, but the SBA has yet to formally begin taking applications.

The grant programs for food services and live venue businesses are encouraging, as those businesses have been especially impacted. For other businesses, the ERC may be a really helpful tool and business owners should consult their tax advisors to take advantage of it. The stimulus funds coupled with increased vaccination levels and re-opening economies may also drive consumer demand, which would be welcome for many business owners.

Kyle Harris is a Senior Vice President - Wealth Management, The Harris Gibson Group, UBS Wealth Management USA. He can be reached at kyle.harris@ubs.com.