ARPA Program

SBA ISSUES ITS LATEST INTERIM FINAL RULE SURROUNDING THE IMPACT OF THE AMERICAN RESCUE PLAN ACT ON THE PAYCHECK PROTECTION PROGRAM

The March 11, 2021 signing of the American Rescue Plan Act (ARPA) into law brought another round of welcome relief to those suffering from the COVID-19 pandemic.  A $1.9 trillion relief package, the ARPA provides benefits impacting individuals and small businesses.  One particular area of the ARPA surrounds enhancements to the Paycheck Protection Program (PPP).   On top of the additional $7.25 billion in funding, there were key changes and updates for non-profit entities, as well as for Shuttered Venue Grant Operator applicants.

Further cemented by the March 18, 2021 issuance of the Small Business Administration’s (SBA) latest Interim Final Rule (IFR), the ARPA adds the following to the list of eligible non-profit entities:

  • Internal Revenue Code (IRC) Sec. 501(c)(3) organizations with 500 or less employees per physical location
  • IRC Sec. 501(c)(5) labor organizations, IRC Sec. 501(c)(7) social and recreational clubs and IRC Sec. 501(c)(8) fraternal benefit societies are eligible, subject to the following limitations:
    • 15% or less of receipts and activities are from lobbying activities;
    • Cost of lobbying activities did not exceed $1 million during the most recent tax year that ended prior to February 15, 2020; and
    • 300 or less employees per physical location
  • Internet publishing organizations with an NAICS Code of 519130 with 500 or less employees[1] per physical location that make certain good-faith certifications.

 

Additionally, the ARPA removes a portion of the mutual exclusivity between the receipt of PPP funds and the receipt of Shuttered Venue Operator Grant funds.  The release of the Consolidated Appropriations Act, 2021 in late December 2020 excluded borrowers that received PPP funding on or after December 27, 2020 from receiving Shuttered Venue Operator Grants.  The ARPA removes this restriction.  However, the reverse does not hold true (i.e., recipients of Shuttered Venue Operator Grant funding cannot subsequently apply for PPP funding).  Furthermore, the SBA will reduce Shuttered Venue Operator Grants by PPP funding received in 2021.  PPP funds received in 2020 will not impact the net amount of Shuttered Venue Operator Grant funding.


Sax will continue to update you as further details are made available.  Reach out to your Sax advisor or email [email protected] with questions.  For more and on-going information relative to your state and business, visit Sax’s COVID-19 Resource Center.


[1] SBA size standards are available as well



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