New pandemic relief for small entities is arriving in three forms.
First, the recent $1.9 trillion American Rescue Plan Act of 2021 (H.R. 1319) included more pandemic-related relief for small entities but did not extend the March 31st deadline to apply for a first or second (forgivable) loan under the Paycheck Protection Program (PPP). So, Congress just passed the PPP Extension Act of 2021 (H.R. 1799), extending the deadline to file a PPP application to May 31, 2021. Specifically, this bill gives the Small Business Administration (SBA) until June 30, 2021, to process PPP applications submitted by lenders by May 31st. The bill includes no other changes to the PPP requirements or funding described in our previous CARES Alerts (linked below). The President is expected to sign this bill very soon. Because May 31, 2021, is Memorial Day, treat the deadline as Friday, May 28, 2021. And do not wait until the last minute, as lenders may stop taking or processing applications or the funding may run out, ahead of the new deadline.
Second, the SBA announced that a new portal to process the $16 billion Shuttered Venue Operators Grant (SVOG) program will begin to accept applications starting on April 8, 2021. This program is designed to assist live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators, and talent representatives who employ 500 or fewer workers and experienced a 25 percent reduction in gross earned revenue, comparing one quarter in 2020 to the same quarter in 2019. Small venue operators that applied for a PPP loan after December 27, 2020, can also apply for an SVOG, with the eligible entity’s SVOG to be reduced by the PPP loan amount. SBA will host a free webinar to fully explain the SVOG program on March 30, 2021, at 2:30PM EST.
Third, the SBA announced that starting the week of April 6th, the loan size of a COVID-19 Economic Injury Disaster Loan (EIDL) will be increased from 6-months of economic injury with a maximum loan amount of $150,000 to as much as 24-months of injury with a maximum loan amount of $500,000. While not forgivable like PPP loans, COVID-19 EIDLs have very low-interest rates and can cover more business costs than the PPP (see CARES Alert #3 for more detail). These changes are retroactive; so borrowers who have applied and received a COVID-19 EIDL package in the past will not lose out on the expansion of the program. If you have borrowed a COVID-19 EIDL, you might request a larger loan. Any new COVID-19 EIDL application or loan in process at the SBA will be eligible for the newly expanded benefit. This new change is in addition to the previous announcement that the SBA will extend deferment periods for all disaster loans, including COVID-19 EIDLs until 2022 to give more time for recovery.
To explain key relief for 501(c)(3) nonprofits and small businesses in the CARES Act (CARES ACT) and related pandemic-relief legislation, including the Economic Aid Act (Division N of the Consolidated Appropriations Act of 2021) and the American Rescue Plan Act of 2021, we published: CARES Alert #1 (Help for Small Businesses & 501(c)(3)s via the PPP); CARES Alert #2 (Get Ready to Apply); CARES Alert #3 (PPP vs EIDL), CARES Alert #4 (Treasury Guidance), CARES Alert #5 (SBA’s Interim Final Rule), CARES Alert #6 (IFR on Affiliation & Religious Nonprofits); CARES Alert #7 (FBO Guidance), CARES Alert #8 (Unemployment Benefits, including FBOs); CARES Alert #9 (Safe Harbor Guidance); CARES Alert #10 (Fixes to the PPP); CARES Alert #11 (New EZ PPP Forgiveness Application); CARES Alert #12 (PPP Application Deadline Extended); CARES Alert #13 (PPP Forgiveness FAQs); CARES Alert #14 (PPP Second Draw); CARES Alert #15 (Rule for PPP Second Draw); CARES Alert #16 (PPP Priority for Small Entities); and CARES Alert #17 (Time Running Out to Apply).
Our CARES Act Team is available to help you navigate these difficult issues, including the unique issues faced by nonprofits, religious organizations, and churches. For assistance, please contact one of our designated attorneys: Nancy LeSourd, Matthew Szymanski, Scott Ward, or Derek Gaubatz. Our CARES Act Team also includes our non-attorney consultant Phil Eskeland. Mr. Szymanski and Mr. Eskeland bring experience from their past service, respectively, as the chief of staff and the deputy chief of staff of the Small Business Committee of the U.S. House of Representatives, including during the legislative response to 9/11.