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

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

The additional money is intended to expand loan eligibility to include more non-profit organizations that were not previously eligible, as well as digital news services that provide local news and public health guidance during the pandemic.

Despite the added funds, however, the legislation does not extend the program, which is currently scheduled to expire on March 31.

This is a problem because there is already a pending application pending approval by the Small Business Administration. And, under current rules, no loans that have not been approved before March 31 will be funded.

This means that banks have to decide how long they want to accept new applications, as it now takes 24 to 48 hours for a bank to receive information from the SBA about whether a submitted loan application has been approved.

In cases where applications have not been approved, the SBA may request more information or marks a business owner as ineligible. Clearing these issues can take days or weeks.

Bank of America, for example, stopped accepting new applications on Tuesday. “Because it is the main provider of the program since it began, we have 30,000 applications in process and we want to give enough time to complete the work and get each client’s application through the SBA process before March 31.” , a bank spokesman said in an email to CNN Business.

Banking associations, the American CPA Institute, 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. of March.

As of March 7, the SBA has contracted 7.6 million PPP loans totaling $ 678.4 billion since Congress created the program last spring, according to data from the federal agency.

More money for restaurants, local operators and minority companies

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

Money to help states help their small business economies: Through the State Small Business Credit Initiative, the legislation allocates $ 10 billion to state governments to help leverage private capital and make low-interest loans and other investments to help get their small business economies back on track. .
More money for non-service companies: The legislation allocates $ 15 billion to the economic disaster loan grant program for economic injuries that will be awarded to small businesses in less-affected areas, especially minority properties.

Special relief for restaurants: The American Rescue Plan includes about $ 29 billion to create a grant program that provides direct assistance to restaurants.

Amid delays, small businesses are desperately waiting for PPP loans
More money for closed premises operators: Another $ 15 billion will be added to the closed-door operator grant program, created by the previous financial aid package. Grants are intended to help those who run museums, theater, concerts and other places that had to close due to Covid restrictions. The bill also allows these operators to apply for PPP loans in addition to these grants.

Additional funding for small business administration: To help the SBA manage all the new programs that have fallen under its jurisdiction as a result of the pandemic, the bill allocates an additional $ 1.325 billion to its budget.

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