Hi Neighbors,
I’m reaching out today to spread the word about new assistance available to small business owners as a result of the bipartisan coronavirus package signed into law last month.
It will take all of us, working together, to overcome the challenges brought on by the COVID-19 pandemic. Please share the information below with the small business owners in your network and let them know that new relief is available now!
Paycheck Protection Program (PPP) Now Accepting Applications
The Paycheck Protection Program will continue to provide a lifeline to small businesses and their employees with an additional $284 billion to assist with payroll and other expenses through March 31, 2021. We also ensured that certain borrowers could apply for a Second Draw PPP Loan. To date, PPP has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, including $11.3 billion to 102,015 small businesses in Minnesota, and $2.25 billion going to 14,483 small businesses right here in the Third District.
Apply here for First Draw PPP Loan, or apply here for Second Draw PPP Loan.
A borrower is generally eligible for a Second Draw PPP Loan if the borrower:
- Previously received a First Draw PPP Loan and used the full amount for authorized expenses only
- Has no more than 300 employees
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
Other key updates include:
- PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs
- PPP loans will cover additional expenses, including operations expenditures, property damage, supplier costs, and worker protection expenditures
- PPP’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, and direct marketing organizations, among others
- PPP now provides greater flexibility for seasonal employees
Applications For Economic Injury Disaster Loans (EIDL) Available
The Small Business Administration’s application deadline for EIDL loans has been extended to December 31, 2021 as a result of the new relief bill. EIDL loans provide small businesses with a long-term, low interest loan to help them survive the COVID-19 crisis.
Note that these are loans and not cash grants. Applicants can apply for both EIDL and PPP loans simultaneously, although the funds cannot be used for the same purpose.
The SBA’s EIDL application is available here.
Employee Retention Tax Credit (ERTC) Expanded
The recent COVID stimulus bill also extends and expands the CARES Act’s refundable ERTC, which encourages businesses to keep more workers on payroll. To receive this credit, eligible employers can report wages on their quarterly employment tax returns with a Form 941.
Key updates to the ERTC under the new stimulus bill include:
- Businesses can now take advantage of both PPP and the ERTC
- For wages paid after January 1, 2021, the ERTC can be applied to 70% of qualifying wages of up to $10,000 per quarter
- Businesses with 500 or fewer employees are eligible to claim the ERTC if they had a revenue reduction of 20% or more in 2020
- Businesses must have partially or fully suspended all operations in 2020 or 2021 to qualify
Moving forward, you can stay up to date on the Shuttered Venue Operators Grants and all economic aid programs administered by the SBA by visiting their website.
I’m doing my best to help Minnesota – and America – get through this pandemic as healthy, economically-stable, and prepared for the future as possible. Your feedback, ideas, and even criticisms are always welcome as we continue through this COVID winter together.
Keep the faith and keep in touch,
Dean Phillips
Member of Congress