How the New COVID-19 Relief Package Can Help Small Businesses

6 min read • Jan 11, 2021 • Joe Kukura

Congress finally passed a second stimulus package, but it took them several months to do so. After a December debate that dragged on for weeks and also included the threat of a full-on government shutdown, President Trump eventually signed this long-delayed COVID-19 economic relief bill just 2 days after Christmas. 

This overdue and relatively modest second stimulus package does some good things for small businesses struggling amidst ongoing stay-at-home and lockdown orders. But small businesses can maximize the support offered in this bill by understanding what the newest COVID-19 stimulus package contains.

This bill is a $900 billion stimulus package—less than half the original $2 trillion CARES Act package Congress passed in March 2020. Still, much specifically targets small businesses. Here’s what’s in that new COVID-19 economic relief legislation and what it can mean for your small businesses.

New PPP Loans

The Paycheck Protection Program (PPP) was one of the most successful aspects of the first stimulus package, and there is another round of PPP loans in this bill too. Specifically, there’s roughly $285 billion in PPP loans, and just like the last round, these loans may be forgiven if you keep employees on the payroll. Your business can apply for these PPP loans until March 31, 2021. 

This time around, there’s a little more flexibility in what you can do with these loans. Funds can be used for other purposes beyond just paying employees. According to a Tampa Bay Times analysis, you can have loan money forgiven if you spend it on remote-work software or for physical measures to keep your workplace safe, like plastic barriers or social distancing resources. These PPP loans also allow money to be forgiven for “property damage and vandalism or looting due to public disturbances that occurred during 2020.”  

Under the rules of these new loans, your application process for forgiveness is far simpler if your loan is less than $150,000. Additionally, the types of businesses that can receive PPP loans have been expanded to cover nonprofits and news organizations.

As ABC News explains, there is also a “second draw” opportunity for particularly hard-hit small businesses for a second PPP loan of up to $2 million, even if you’ve already received a previous PPP loan. The criteria for these “double-dip” second loans are a little more strict. To qualify for a second PPP loan, small businesses need to have fewer than 300 employees and must provide proof that they’ve experienced a loss of at least 25% in revenue in any one particular quarter of the pandemic period compared to the same quarter the year before. 

These new PPP loans have protections in place to prevent large companies from getting PPP loans they may not actually need. This time around, publicly traded companies will not be eligible to receive the loans.

The $600 Stimulus Check

There are more stimulus checks in this relief deal, and some people have already received the payment. But it’s only a $600 check this time, which may be disappointing for those who had their hopes up for a $2,000 check. Your small business will not receive a check, though you will, and it does mean that consumers will have a little more money to spend.

According to CNBC, there will also be some extra spending money for those who’ve lost work in the pandemic thanks to the new bill’s $300 weekly enhanced unemployment benefits.

Incoming President-elect Joe Biden has called for $2,000 stimulus checks once he takes office. That’s going to be a lot easier for him now that Democrats have won the Senate, giving them unified control of the Presidency, House of Representatives, and Senate.

Funding for Theaters, Live Music Venues, and Cultural Centers

Fortune points out the relief package contains some $15 billion in grants for entertainment venues like movie theaters, Broadway-style theaters, and live music venues. These types of venues have been operating at very tiny capacities—or mostly not at all during the pandemic. Even with the introduction of a COVID-19 vaccine, entertainment venues face several long, hard months until they can reopen or operate anywhere near their typical capacities.

More SBA Disaster Loans

The Small Business Association’s SBA Disaster Loans have been around since before the pandemic, providing business loans in the wake of damage from wildfires or tornados. But these loans have been critical during the COVID-19 shutdowns. This new relief package contains a $20 billion infusion of new disaster loans for businesses hurt by the shutdowns, and these loans will also be awarded through the Small Business Administration. If you’re interested in applying, check out our guide on how to apply for an SBA Disaster Loan.

Will There Be Yet Another Stimulus Package?

Yes, there will probably be another round of stimulus measures when Joe Biden becomes president. The New York Times reports that President-elect Biden has called this stimulus package that just passed a “down payment” on his upcoming, much more ambitious COVID-19 economic relief package plans. Details are scarce on those plans. But the Times notes that Biden hopes for “more funding to help firefighters, police officers, and nurses,” and, of course, those aforementioned $2,000 stimulus checks. 

We have no guarantee those checks will be approved by Congress, let alone even considered. But the Democrats having control of all 3 legislative branches of government makes more generous relief measures a lot more likely.

At this point, we can’t be certain what any new economic stimulus benefits consumers and small businesses will receive under the incoming Biden administration. We can only be sure of what is signed, sealed, and delivered in the most recent set of stimulus benefits. This is indeed a “skinny” relief bill, as some lawmakers referred to it. But there are sizable grants and loans available to small businesses in the new bill, along with a modest round of stimulus money coming into consumers’ pockets, and good reason to hope that more help is on the way.

Joe Kukura

Joe Kukura is a San Francisco freelance writer whose work also appears in SF Weekly and SFist. He’s written financial advice for NerdWallet, tech industry analysis for the Daily Dot, sports content for NBC Bay Area, and good, old-fashioned clickbait for Thrillist.