The federal government created several economic relief programs to assist small businesses with recovery from the impact Covid-19 had on their solvency, stability, and profitability. Though the deadlines vary, several programs originally introduced in 2020 have been extended in 2021 to dates as late as 2023.
This is good news because the economic forecast is encouraging. Approximately 26,000 new franchise operations are projected to open in 2021, adding close to 800,000 jobs in the retail, food, and services sectors. Not only are franchised businesses reopening, but – with proper planning and evaluation – they are also well positioned to expand and grow.
Economic Relief Loan and Grant Programs
The American Rescue Plan Act, introduced by the Biden Administration in January 2021 and signed into law in March 2021, provides economic relief to households, industries, nonprofits, and others impacted by Covid-19. The Small Business Administration (SBA) has primary oversight and administration of the loan and grant programs designed to support small businesses and help keep them viable.
These loan and grant options have different eligibility requirements. After careful review of each program’s checklist for qualifications, you will be able to determine if one or more is right for your business.
The Paycheck Protection Program (PPP). Established in 2020, the PPP helps businesses retain and pay their employees during the pandemic. This is a government-secured loan; however, some businesses may qualify for forgiveness. The application deadline has been extended to May 31, 2021.
The Restaurant Revitalization Fund (RRF). The RRF was included in the American Rescue Plan Act. Eligible restaurants, bars, and other businesses in the industry can receive funding equal or up to $10m in lost revenue due to Covid-19 and no more than $5m per location. The RRF will expire in March 2023.
Covid-19 Economic Injury Disaster Loan (Covid-19 EIDL). Small businesses, including those in the agricultural industry
, and nonprofits located in the U.S. and territories can apply for this loan. Funding is restricted to operations-related expenses and obligations. New guidelines were introduced in late April 2021 for future applicants.
Cross Program Eligibility: SBA Covid-19 Relief Options. Qualifying small businesses are permitted to pursue more than one loan or grant relief program. However, there are eligibility restrictions you should be aware of before you apply to more than one. The respective deadlines for each program will remain.
Additional Federal Funding Programs
There are additional federal funding options available through different federal agencies that are not pandemic-related and have different eligibility requirements, award amounts, and deadlines. These programs are often more industry specific for small business operations. For example, some small businesses apply for federal certifications to compete for government contracts or to become eligible applicants for other grant awards offered by the Department of Labor (DOL).
We Can Help
Lusthaus Law P.C. has a proven record of assisting franchisors and franchisees with their business operations at every stage of development. We are committed to our clients’ success and keep our finger on the pulse of the industry to ensure that we provide the best and most up-to-date franchise law counsel.
Contact us today to learn more about how Lusthaus Law P.C. can help you navigate a clear path towards your franchise’s successful future.