Small businesses hurt by the pandemic can access more loans and grant money in the $900 billion stimulus bill passed by Congress in late December 2020. The new round of stimulus money again includes $300 million for fisheries assistance. It is not yet clear how much each state will receive from the new allocation other than $30 million set aside for tribal fishing communities. In addition to the fisheries assistance program, the stimulus program includes grants and loans to food processors that have invested in new equipment and processes to protect workers from the coronavirus.
Under a separate provision, seafood is included as eligible for U.S. Department of Agriculture food purchases.
The Paycheck Protection Program, which reopened on January 19 under more stringent qualifying standards, is funded at $284 billion. While key changes will make it easier for small businesses to apply, unlike the last round, they must show a gross revenue loss of 25% during one quarter of 2020 compared to the same quarter in 2019. New borrowers, which can have 500 employees or fewer, can request up to $10 million. The program will also allow accounts receivable debt as a forgivable expense. For those who have already received a PPP loan and are seeking additional money, the application requirements are stricter. Businesses can only have 300 or fewer employees, and the maximum loan amount is $2 million. Businesses also must have spent all the money from their first loan before applying for the second.
Fishermen throughout New England are anticipating additional federal relief funds from the new stimulus bill. Photo courtesy of Civil Eats.com
To have the loan forgiven a business must use at least 60% of the money for payroll expenses. Businesses with loans of $150,000 or less qualify to use a simplified forgiveness application.
Most eligible businesses get a maximum loan that is 2.5 times their average monthly payroll costs, meaning the loan would fund two-and-a-half months of payroll expenses. Restaurants, bars and hotels can qualify for loans worth up to 3.5 times their average monthly payroll costs. Another key change is that the period the loans will cover is now 8 to 24 weeks. The first iteration of the PPP only permitted loans that covered either 8 weeks or 24 weeks. The new date range gives businesses that couldn’t rehire staff because of pandemic restrictions more flexibility to meet the 60% payroll requirement for loan forgiveness.
The Economic Injury Disaster Loan program (EIDL) was due to end on December 31, 2020 but has been extended until the end of 2021. More than 10,400 EIDL loans were approved for Maine businesses as of November 2020 totaling more than $597 million. The 30-year loan is not forgivable, but the interest rates are comparatively low (2.75% for a nonprofit organization and 3.75% for a small business). Loan payments are deferred for one year. The Maine Small Business Development Centers have resources to help small businesses navigate these programs. For more information, visit https://www.mainesbdc.org/.
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