(Washington, D.C.) – U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) today issued a statement on the small business provisions in the historic American Rescue Plan Act, which passed the U.S. Senate today. The bill includes $50 billion in aid to small businesses and is supported by a broad, diverse and bipartisan coalition—including governors, mayors, and small business owners in red states and blue states alike—who agree that this legislative package is necessary to help save lives, livelihoods, and Main Street businesses.
“The American Rescue Plan Act will get overdue relief to the restaurants, bars, and nonprofits, as well as small businesses in Black, Latino, rural, and other communities that have felt the worst economic effects of the pandemic,” Cardin said. “More important, this bill makes the investments necessary to get Americans vaccinated, so we can then begin to open up more public spaces and begin our economic recovery. We need to get the this bill to President Biden’s desk as quickly as possible, because the American people need the American Rescue Plan and they need it now.”
The food services and nonprofits sectors have been two of the hardest-hit during the pandemic. As of December 2020, 110,000 eating and drinking places were closed temporarily, or for good, according to a study by the Nation Restaurant Association. The study also found that the sector finished 2020 nearly 2.5 million jobs below its pre-COVID level; and that up to 8 million restaurant employees were laid off or furloughed during the peak of initial closures last year. The nonprofits sector meanwhile has lost nearly 1 million jobs, including 50,000 jobs in December 2020 based on findings in a recent Johns Hopkins University report, which also projected that it will take 18 months to regain the jobs.
The pandemic has also devastated small mom-and-pop small businesses, especially those in Black, Latino, and other underserved and underbanked communities. During the pandemic, the number of small businesses open and operating has plummeted 34%, with Black communities seeing a 41 percent reduction in the number of active business owners between February and April 2020. These small businesses will face additional challenges—and costs—in the months ahead as they strive to keep staff and patrons safe, and as they retool their businesses to compete in the post-COVID world.
The American Rescue Plan Act provides overdue aid to small businesses in the hardest-hit communities and sectors. The bill includes:
- a new $28.6 billion grant program for restaurants and bars that have lost revenue because of the pandemic;
- an expansion of Paycheck Protection Program eligibility to include more nonprofits and digital media companies, as well as an additional $7.25 billion for the program;
- $15 billion for the Economic Injury Disaster Loan (EIDL) Advance Grants Program to provide grants of up to $10,000 per business to small businesses in low-income communities that have been most affected by the pandemic;
- $1.25 billion for the Shuttered Venue Operators Grant program. Eligible applicants can now access both the Shuttered Venue Operators Grant and PPP to address SVOG’s delayed start.
- $175 million for Community Navigator pilot program which is designed to help small businesses in underserved and underbanked communities access the COVID-19 relief resources available to them; and
- $1.325 billion in administrative funding to the Small Business Administration so the agency has the resources and manpower necessary to implement the programs.
The $50 billion in aid provided by the American Rescue Plan is in addition to the $1 trillion in COVID-19 small business aid that has already been approved by Congress.Cardin has been a lead negotiator of Congress’ small business relief efforts, and has led efforts to ensure that funds are distributed equitably. The CARES Act included a Cardin measure to create the EIDL Advance Grants Program, as well as a provision drafted by Cardin and Senator Jeanne Shaheen (D-N.H.) that required SBA to issue guidance to financial institutions participating in PPP to prioritize loans for underserved small businesses. In April, Cardin secured a $60 billion set-aside in PPP for smaller lending institutions, such as credit unions, community banks, Community Development Financial Institutions, and Minority Depository Institutions that can better reach Black-owned businesses. In the $900 billion bipartisan relief bill that passed in December, Cardin also secured an additional $60 billion in set-asides that included $35 billion for borrowers who were unable to apply for an initial PPP loan, of which $15 billion is for smaller borrowers with up to 10 employees or loans of up to $250,000 in low-income areas; and $25 billion for second PPP loans for the same small borrower category.