On March 10, Congress passed the $1.9 trillion American Rescue Plan Act of 2021 (Act), the Biden Administration’s COVID-19 relief bill.
The Act made very minor revisions to the Paycheck Protection Program, but dramatically expanded access to and funding for Economic Injury Disaster Loans (EIDLs). Section 5002 of the Act appropriates $15 billion to businesses that apply for EIDLs under Section 7(b)(2) of the Small Business Act, are located in a low-income community, have suffered an economic loss of more than 30%, and have under 300 employees.
$10 billion of this amount is reserved for the many businesses who previously applied for EIDLs, following the passage of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Venues Act) in January, but have not yet received the full amount of their loans. The other $5 billion is reserved for EIDL advances of $5,000 to such eligible businesses, which have suffered a more than 50% economic loss and have under 10 employees. It is important to note that these EIDL advances do not need be paid back even if the respective business is subsequently denied an EIDL, is in addition to any EIDL advance under the CARES Act or the Venues Act, and does not count as gross income for tax purposes.