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American Rescue Plan: direct funding opportunities to assist small businesses

April 29, 2021

The 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act and the recently passed American Rescue Plan Act of 2021 (ARP) provide substantial assistance opportunities for state and local governments and the businesses in your jurisdictions.

Below is an overview of several significant direct-to-business assistance opportunities and how these programs may be applicable to businesses within your community. Consider sharing these resources with your business community to help ensure that all relief funding options are being explored as well as to determine if your organization has a role in assisting local businesses access these programs.

Employee Retention Credit

The Employee Retention Credit (ERC) program applies to businesses that were adversely impacted by COVID-19 either through a significant decline in gross receipts or government-imposed restrictions causing partially suspended operations leading to a reduction in sales. Restaurants and related hospitality-type businesses are most likely to be eligible for assistance under this program as there were likely limits to the level of operation allowed (hour and capacity restrictions) but not a complete shutdown of the business. The ERC allows for the business entity to receive a tax credit for a portion of the wages paid to employees for each quarter in which the business was eligible. When originally adopted, the ERC was mutually exclusive to the Paycheck Protection Program (PPP).With recent legislative changes, businesses that utilized PPP funding are now also eligible for the ERC program. The credit is claimed by completing appropriate tax forms and automatically awarded to businesses that meet the eligible criteria. The tax credit is not a competitive award, and should be evaluated by any business that realized either a significant decline in gross receipts or had operations partially suspended by governmental restrictions.

COVID-19 Economic Injury Disaster Loan