The Latest Coronavirus Relief Package
On Sunday, December 27, 2020, President Trump signed into effect a new $900 billion dollar Coronavirus Relief Package. Like the $2 trillion CARES Act passed in May of last year, the new bill provides many forms of relief, including the extension and modification to several provisions of the CARES Act as well as some new relief measures. Notable highlights of the new relief package include:
- Immediate financial assistance in the form of direct payments to individuals ($600 for those making up to $75,000), couples ($1,200 for those making up to $150,000 combined), and dependent children ($600 per each child under 17 years old).
- Extended unemployment insurance and benefits.
- $284.5 billion in additional Paycheck Protection Program (PPP) loans and $20 billion for new Economic Injury Disaster Loan Grants for businesses in low-income communities.
- $15 billion in funding for live venues, independent movie theaters, and cultural institutions.
For some of our readers here, you may be most interested in numbers three and four.
PPP: Paychex Protection Program
As part of the $900 billion COVID-19 Relief Package, $284.5 billion is allocated for loans to small businesses, independent contractors, nonprofits, and more. Here are the details:
- You can apply for this round of funding even if you received a previous PPP loan.
- Loans are maxed at $2 million. The loans are applicable for businesses with less than 300 people.
- To qualify: You need to demonstrate a 25 percent decline in revenue in one quarter in 2020 compared to the same quarter in 2019. For example, if your business brought in $1,000,000 in revenue in Q2 of 2019 and $749,000 in revenue in Q2 2020, you qualify.
- The loan amount is calculated by 2.5 times the amount of your average monthly payroll. For example, if your payroll is on average $500,000 per month, you would receive a forgivable loan of $1,250,000.
- To get forgiveness on the loan, you need to spend 60 percent of the loan on payroll.
To determine your eligibility, we recommend you consult with your treasurer and/or bank.
Grants for Theaters, Venues, and Cultural Institutions
This time around, the Coronavirus Relief Package has allocated $15 billion for grants (not loans) to theaters, venues, and cultural institutions adversely affected by the COVID-19 pandemic. This is targeted relief for an industry not originally singled out in the original CARES Act, and these funds could be a lifeline for many organizations like Broadway, local theaters, and playhouses, to art and history museums. Here are the details:
- Apply for a grant via the Small Business Administration to support six months of payroll and costs including rent, utilities, and maintenance.
- Grants are applicable for organizations with less than 500 employees.
- Applicants must have lost at least 25 percent of their revenue to qualify, and those that have lost more than 90 percent will be able to apply first, within the first two weeks after the bill becomes law.
- Grants are capped at $10 million, and grant funds can be used towards costs that occur from March 1, 2020 through December 31, 2021.
There are some exclusions to these grants, so we recommend that you consult with your counsel, treasurer, and/or bank to further understand these factors as well as the amount you are eligible to apply for.
Although we don’t know what future COVID-19 relief may look like, President-Elect Biden has stated that he will make it a central priority in his first 100 days in office.