The biggest federal stimulus package in U.S. history includes several spending items that will help the financial services industry weather the final stages of the pandemic and related economic downturn.
President Joe Biden signed the sweeping $1.9 trillion coronavirus relief package last week, and $1,400 checks are already arriving in individual bank accounts. Although the checks are getting the most attention, several items in the bill will help small-employer agencies and advisor businesses, trade association executives say.
More funding for the Paycheck Protection Program is big for small employers, said Armstrong Robinson, chief advocacy officer for Finseca. The stimulus bill includes $7.25 billion in additional PPP funding.
Small businesses received more good news Tuesday, when the House of Representatives voted to extend the PPP for two months.
The PPP Extension Act of 2021 passed the House on a 415-3 vote and extends the program to May 31, instead of the current date of March 31. It also gives the Small Business Administration an additional 30 days to process loans. The Senate is expected to pass the bill as well.
Through March 14, the SBA had approved more than 2.7 million loans worth about $181 billion this year alone. When the program reopened in January, it had $284 billion in funding.
“For small businesses, the PPP was a huge lifeline,” Robinson said.
More time is crucial for small business owners, said Kevin Kuhlman, vice president of federal government relations for the National Federation of Independent Business.
“Extending the authorization for the PPP loan program beyond the end of the month is welcome news to small-business owners who will benefit from the extra time,” he said. “Owners had a short period of time to decide whether to apply for a first or second draw or not after the passage of the Consolidated Appropriations Act of 2021 and this extension allows owners to plan accordingly for their business.”
In addition, agency and advisor owners will benefit from expansion of Affordable Care Act subsidies, extension of the federal refundable payroll tax credit for COVID-19-related paid sick and family leave for small businesses, and extension of the employee retention tax credit for an additional six months.
All are included in the stimulus package.
The employee retention tax credit has been a “very successful tool using the tax code rather than a direct spend of money or the loan program of the PPP,” Robinson noted.
Here’s a look at what else is in Biden’s “American Rescue Plan:”
* $1,400 direct payments to individuals earning less than $75,000, heads of households earning less than $112,500 and married couples earning less than $150,000.
* Phase-outs begin after that, cutting off completely at $80,000 for individuals, $120,000 for heads of households and $160,000 for couples. Biden’s name will not be on the checks.
* Federal unemployment payments of $300 per week would be extended through Sept. 6. The first $10,200 of jobless benefits would be non-taxable for households with incomes under $150,000, but only for benefits from 2020.
* The measure also provides a 100% subsidy of COBRA health insurance premiums to ensure that the laid-off workers can remain on their employer health plans at no cost from April 1 through the end of September.
* $350 billion for state, local and tribal governments for costs incurred until the end of 2024.
* $170 billion to help reopen schools safely.
* $25 billion for a Restaurant Revitalization Fund through the Small Business Administration for restaurants, bars, food trucks and caterers. Also provides another $7.25 billion for the Paycheck Protection Program.
* Increases the child tax credit amount from $2,000 to $3,000 for children between the ages of 6 and 16, and to $3,600 for children under the age of 6.
* $20 billion for emergency rental assistance.
* $810 million for Pandemic EBT Benefits and $227 million to extend the 15% increase in SNAP benefits through September.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com. Follow him on Twitter @INNJohnH.
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