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The Midnight Covid-19 Relief Package: 3 Provisions That Are Important For Small Business

Rhett Buttle • January 4, 2021

WASHINGTON, DC - DECEMBER 28: The sun rises of the US Capitol.      GETTY IMAGES

As 2020 comes to a close, we are beginning to see some light at the end of the tunnel for the Covid-19 pandemic.The Food and Drug Administration has approved two vaccines and this past week and we saw the vaccine being administered on national television. While we know deploying the vaccine throughout the country will take many months, we should all rejoice in the heroic advancements in modern medicine that have netted a Covid vaccine in less than 12 months.



While this is certainly hopeful, millions of small businesses are still struggling to keep their doors open and lights on. In this vain, Congress was able to pass a $900 billion Covid-19 relief measure that President Trump finally signed into law on December 27. The bill came after eight months of fractured negotiations that saw House and Senate leaders produce multiple pieces of legislation at vastly different price tags. While certainly not perfect, the bill did include several provisions which will have positive impact for small business owners and their communities. Here are three: 


1. Paycheck Protection Program (PPP) Changes


The legislation provides for significant changes to the PPP. First, for those small businesses who have received (or will receive) a PPP loan, the legislation created a simplified forgiveness process for loans less than $150,000. This is good news as the vast majority of small businesses fall into this category. Additionally, the new law provides that some businesses will be eligible for a second PPP loan. To do so, businesses will need to either: 1) have no more than 300 employees, 2) demonstrate a loss of 25% in gross receipts in any quarter of 2020 compared to the same quarter in 2019, and 3) have fully spent the first PPP loan. Also included was language clarifying that the PPP can be used for additional business expenses, including personal protective equipment and adaptive investments to help businesses protect their workers and customers. 


The legislation also expanded the PPP to cover 501(c)(6) organizations, which includes many membership organizations that are a part of the small business ecosystem. An additional $15 billion in funding was set aside for entertainment venues, movie theaters, and museums that are experiencing significant revenue loss. 


2. More Money in the Pocket of Working Families


Small businesses cannot survive if their customers do not return. For them to come back, Americans need money in their pockets. While many policymakers would argue we needed to do more — giving consumers money to put back into the economy is critical. Similar to the last relief package several months ago, this legislation also provides a round of Economic Impact Payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, along with $600 for each child dependent. The new legislation also takes steps to keep the bottom from falling out of the economy by supporting individuals who are struggling to pay for basic necessities like food and housing because of the pandemic. The legislation temporarily extends the unemployment programs created by the CARES Act for an additional 10 weeks through March 14, 2021. The legislation also extends and phases out the Pandemic Unemployment Assistance (PUA), a temporary program covering self-employed and gig workers, through April 5, 2021. 


3. Expanded Tax Benefit for Employee Retention


The new law extends and expands the CARES Act’s refundable Employee Retention Tax Credit (ERTC) through June 30, 2021. The extension of this tax credit will help keep additional U.S. workers on payroll and more small businesses and nonprofits across the country afloat. Additionally, small businesses receiving a PPP loan will now be able to opt-in for the ERTC program. Previously, businesses couldn’t avail themselves of both the PPP and ERTC. This is a crucial change to ensure businesses have access to as many tools as possible to keep themselves operating. 


While this legislation is crucial for small businesses and our country during this holiday period, it will not be enough. Already President-elect Biden has indicated that he will call on Congress to do more.


For now, some help is on the way, but more work will need to be done. In early 2021, policymakers will need to work together to pass additional relief to ensure that our country has the resources it needs to quickly deploy the Covid-19 vaccine, help small business reopen, and provide working families with the resources to move forward and further weather the devastating impacts of the Covid-19 pandemic.


This piece originally appeared in Forbes on December 29, 2020. You can view it online here.

Rhett Buttle is the founder of Public Private Strategies, Executive Director of the Small Business Roundtable, Founder of the NextGen Chamber of Commerce, a Senior Fellow at The Aspen Institute, and a contributor for Forbes.

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