What the Stimulus Bill Means for Your Janesville Business

Paycheck Protection Program Loans
 
The Paycheck Protection Program (PPP) made its first appearance in the CARES Act, which passed into law on March 27, 2020. The intent of PPP loans was to provide small businesses with necessary funds to maintain their payroll, cover applicable overhead, and rehire employees who had been laid off due to economic tumult.
 
Both First Draw PPP loans and Second Draw PPP loans may become forgivable loans if the recipients meet the necessary criteria. Recipients of either round of PPP loans may qualify for loan forgiveness if, within six months after receiving the funds, a minimum of 60% of the loan is spent on payroll costs and the rest is spent on other qualifying expenses, and employment and compensation levels remain consistent. Borrowers can apply for loan forgiveness any time before the maturity date of the loan. Forgiven PPP loans will not be considered taxable income by the IRS.

 

A New Restaurant Revitalization Fund
 
The Restaurant Revitalization Fund (RRF) will disperse $28.6 billion in grants to qualifying food service businesses that experienced a loss in revenue in 2020 compared to 2019. $5 billion of this fund is specifically earmarked for small businesses that brought in less than $500,000 in gross receipts in 2019. Grants may be available to independent food service businesses through the Small Business Administration (SBA). If a restaurant or bar is owned by the state or local government or is part of a publicly traded company, it isn’t eligible for an RRF grant. Owners that operate more than 20 restaurant locations are also ineligible. If, however, you own a restaurant franchise but do not control more than 20 locations, you will likely be able to apply.
 
Traditional restaurants aren’t the only small businesses that qualify for an RRF grant. A variety of similar establishments are named in the American Rescue Plan Act, including food stands, food trucks, food cards, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms — or any licensed facility or premise of a beverage alcohol producer where the public may taste, sample or purchase products.
 
If you receive an RRF grant, those funds can be used only for eligible expenses, such as payroll costs, principal and interest payments on a mortgage (not including prepayments), rent, utilities, maintenance expenses, personal protective equipment, cleaning supplies, supplier costs, operational expenses, paid sick leave and other essential expenses (the Small Business Association determines the parameters of “essential expenses”). The RRF application and full details about the fund can be found on the SBA website.
 
What the Stimulus Bill Means for Your Janesville Business
 
Janesville, Wisconsin, is home to wonderful restaurants, wineries, breweries, pubs, diners and other cherished small businesses. No one wants the necessary safety measures of the past year to diminish the local culture. So, if you’re asking yourself what the stimulus bill means for your Janesville business, the answer is that the funds can help these small businesses stay afloat after the challenges of the COVID-19 pandemic. With an influx of capital, we can help keep Janesville the unique destination we know and love.
 
If you’d like to discuss any other loan options, visit us at the Janesville location of the First National Bank and Trust. Our experts will answer your questions and assist however they can.