It has not been signed into law just yet, but Congress has voted to pass a second relief bill in response to the COVID-19 pandemic.
Like the last bill, this one contains significant support for businesses, and Kodiak businesses may have an easier time getting hold of it this time around.
“The government listened to where there were issues for the small business community, whether it’s sole proprietors, fishermen, 1099 employees — those were all big issues,” said Kodiak Chamber of Commerce Executive Director Sarah Phillps.
“They listened and they’ve made some accommodations.”
The Paycheck Protection Program is still the biggest part of the relief effort.
This time, $285 billion has been set aside for the program, but with some tougher restrictions and additions aimed at directing funds to smaller operations. Businesses will still get the money as a loan, and then the loan will be forgiven if all the guidelines are adhered to.
Only businesses with fewer than 300 employees can apply; publicly traded companies can’t apply, for instance. More expenses can be deducted, such as food that restaurants have purchased or personal protective equipment. And hotels and food service businesses are eligible for more money.
Last time around, Kodiak businesses got $7.8 million in loans through PPP. The Kodiak Area Native Association and Brechan Construction were the largest beneficiaries, each receiving at least $1 million of the total amount.
In Kodiak, 218 businesses received PPP funds with loan amounts up to $150,000, allowing them to retain at least 221 employees, according to data released by the Small Business Administration.
Of the businesses that received loans, six are identified as independent contractors, nine were self-employed, 13 were nonprofits and 41 were sole proprietors. The rest were other types of companies, such as corporations and limited liability companies.
Anyone who got PPP in the last round is still allowed to apply in this round as long as they have spent all the money they got in the first round.
Another significant change is that revenue that comes in through the program is not taxable, something that wasn’t clear in the previous version of the bill.
“There were a lot of businesses in the first round who didn’t feel comfortable applying in the first round because they weren’t sure about the implications they would see down the road,” Phillips said.
The $10,000 Emergency Injury Disaster Loans (EIDL) are still available too, and this time they are complementary to PPP rather than exclusive. Previously, money businesses got in one had to be deducted from the other. That’s no longer the case.
There’s a whole other program, separate from PPP, aimed at live events and performance spaces, such as museums and convention centers. It’s for places that require tickets and attendance sales. There’s also another $300 million aimed just at fishermen.
Phillips said she was hoping the smallest of the small businesses — sole proprietors, fishermen and 1099 employees, or what the IRS calls independent contractors — would see bigger benefits as well.
Those kinds of businesses either weren’t included at first or didn’t have great ways to document losses. A one-person photography company, for instance, might not cut themselves a paycheck every month, making it hard to show the government that they suffered.
Those kinds of businesses are included from the beginning this time, and with more restrictions on bigger businesses, they might have a better chance.
“We shouldn’t see industries waiting and waiting and waiting for funds. It should be available all at once,” Phillips said.
The application process isn’t clear yet, but local banks will likely be involved. It’s also unclear when the program could start, but it could be before the end of the year.
“Start compiling paperwork now,” Phillips said.