The following is a guest blog by Greater Mankato Growth member, Blethen Berens. In it they highlight two important elements of the American Rescue Plan as it relates to employee leave.
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (hereinafter referred to as the “ARPA”). ARPA provides, among other things, important changes to the paid sick leave and expanded family and medical leave originally provided for under the Families First Coronavirus Response Act (FFCRA) for employers with less than 500 employees. The most important thing to note is that these leave options are completely voluntary for employers: Employers are not required to offer either emergency paid sick leave or paid FMLA leave to their employees under ARPA, but there are tax incentives available to encourage employers to voluntarily offer this paid leave.
In our blog post on the small business support included in the American Rescue Plan, it was clear that the Restaurant Revitalization Fund (RRF) will be a key opportunity for many of our hardest-hit businesses to recover. It is not yet known when applications for the RRF will become available, with the SBA stating that it will take “weeks, not months.” While full details of this program are not yet available, this blog post will dive deeper into what we know right now about the Restaurant Revitalization Fund, how it can be used, and how to prepare to take advantage of it. Click here to skip right to the section on how to prepare to apply.
What is the Restaurant Revitalization Fund?
As part of the American Rescue Plan, signed into law on March 11, 2021, Congress recognized the great burden placed on restaurants, bars, and other similar places of business with the creation of the Restaurant Revitalization Fund (RRF). This established a $28.6 billion fund that restaurants can use to cover up to all of their pandemic-related revenue losses. The amount is determined by subtracting 2020 revenue from 2019 revenue and providing a grant for the difference, minus any PPP loans received. For example, a restaurant that made $400,000 less in revenue in 2020 compared to 2019 and also received $100,000 in PPP loans would be eligible for a grant of $300,000. Separate calculations are used to cover businesses that opened in 2019, 2020, or haven’t opened yet. These grants are not taxable and expenses covered by them can still be deducted as normal. Note: The RRF does not contain enough to cover all eligible restaurants without additional funding from Congress.As such, businesses eligible for a first or second draw PPP loan are urged to continue to take advantage of that despite the fact that it reduces the amount of the RRF grant.
Today, Governor Walz announced reduced COVID-19 restrictions (Executive Order 21-11) for social gatherings, increases to business capacity limits, and increases to large venue capacity limits.
This week, President Biden signed the $1.9 Trillion American Rescue Plan. This is the third major stimulus package passed by the Federal Government in response to the COVID-19 pandemic. While there has been much discussion about relief to individuals including a new round of $1400 stimulus checks & unemployment benefit extensions as well as increased funding for vaccine purchase & distribution, this blog post will focus on the relief programs impacting businesses including the creation of the Restaurant Revitalization Fund, expansions and changes to the PPP & EIDL loan programs, and expansions and changes to the Employee Retention Tax Credit Program. The full text of the law can be found here.
Restaurant Revitalization Fund
Edit: An updated post specific to the Restaurant Revitalization Fund & how to prepare for an application can be found here.
Restaurants, bars, & other elligible entities will be elligible to apply for a grant equal to 2019 revenue minus 2020 revenue minus PPP loans already received.
Businesses that opened in 2019 will determine their amount of grant eligibility by multiplying their average monthly gross revenue in 2019 by 12.
Businesses that opened in 2020 that experienced operating losses will be elligible for a grant under a similar formula that covers losses incurred.
Businesses that have not yet opened but that have already incurred payroll costs will be elligible for a grant that covers those expenses.
*Note: Formulas for determining grant eligibility for all three above categories may be modified via SBA guidance.
The Paycheck Protection Program has been one of the most visible programs inside the US Government’s response to the pandemic. The overall goal of the program was to get loans to small businesses to help them keep their staff employed as we entered the unknown waters of a pandemic economy. If these small businesses kept their staffs employed, these loans would be forgiven, and the loans would essentially convert into grants. There was recently a change to how much funding a small business would qualify for, and this change will have a dramatic impact on the smallest businesses who were previously either left out of the program or only qualified for a nominal amount of funds.
These changes revolve around people who report their business income using a Schedule C on their tax return. Schedule Cs are typically used for sole proprietors (fancy way of saying people who do business in their personal name with no formal entity like a LLC or corporation), but some LLCs also use Schedule Cs. Up until this point, these businesses would determine the amount of a loan they qualified for by combining the annual payroll costs of any employees with the net profit of the business. These two figures formed the basis of the calculation, and the idea was that these figures would represent the combined compensation paid the employees and the owner.
The unintended consequence of how the program was initially setup is that many of the smallest businesses operate at essentially a breakeven where income is nearly entirely offset by expenses. Due to this, the “owners” portion (net profit) could be very low or $0 which caused their PPP loan amount to go down. With the new changes, the “owner” compensation portion of the calculation has been switched from using the net profit to the gross profit. This change will dramatically impact the amount of PPP funds a small business can qualify for as well as even allowing some businesses with a negative net profit to receive PPP funds when previously they did not qualify at all.
These changes became effective on March 5th, and they will be in place through the end of the program on March 31st. This can have a massive impact on some of the smallest businesses in our community. Businesses that use Schedule Cs range from popup stands at the farmers market to businesses on Front Street. This group of businesses provide much of the vitality that makes Mankato special; so let’s get the word out so these businesses survive!
At Pioneer Bank, we have funded over 1,350 PPP loans for our community with a median loan size of $20,000. Most banks have access to this program, but anyone can feel free to send any questions to Clay Sharkey.
Conducting business activities amid the COVID-19 pandemic takes careful planning to ensure employees and customers are safe and business goals are met. Mayo Clinic experts have carefully developed strategies and protocols focused on mitigating COVID-19 within the health care setting, where halting transmission is critical. They are also currently tailoring those strategies to support and advise businesses in settings outside of health care.
Mayo Clinic has refined its expertise and may offer advisory services in the following areas, which may be relevant to your business:
Capacity for private social celebrations & events (including but not limited to weddings, funerals, life milestones, family reunions, religious services, and other similar occassions) occurring at venues involving the consumption of food or alcohol has increased from 10 indoor & 15 outdoor to 50.
Maximum capacity of indoor and outdoor space for restaurants, bars, gyms, & venues providing entertainment expanded from 150 to 250.
Facilities allowing food and beverage consumption are allowed to remain open until 11:00 pm rather than 10:00 pm
Greater Mankato Growth has partnered with Mayo Clinic Health System to offer Greater Mankato Growth’s Nonprofit Engagement Fund for membership, programs and events. This partnership was established to ensure non-profit organizations and their staff can take advantage of the many benefits offered through Greater Mankato Growth. The partnership recognizes that nonprofit organizations throughout Greater Mankato are a steady source of economic growth for our region as well as a key partner in providing vital services, employing residents, and improving the quality of life.
“Nonprofit organizations provide vital services that impact the health and wellness of our employees, patients and community members. We are excited to be the sponsor for Greater Mankato Growth’s nonprofit scholarship fund which will enable leaders from this sector to participate in various GMG opportunities.”
-Dr. James Hebl, Regional Vice President, Mayo Clinic Health System, Southwest Minnesota
Nonprofit Membership Rate:
Nonprofits are now eligible to pay the Basic Level pricing at $330 and receive the benefits of the Engaged Level (typical pricing at $770). To be considered, nonprofits must meet one of the following criteria:
•Organizations that have an annual budget or gross revenue of $400,000 or less
•Proven financial hardship with detrimental impact to the local community. This information must be included in the application narrative.
Engagement Funds for Events and Programming:
Through the Greater Mankato Growth Engagement Fund, Greater Mankato Growth (GMG) will offer partial funding toward Greater Mankato Growth events and programming, including but not limited to:
• Professional Development • GMG Talent Programs (including but not limited to Leadership Institute, Young Professionals, Navigators and Executive Sounding Board) • Volunteer Groups such as Ambassadors and Cavaliers • Events (including Business After Hours, Business Awards and Hall of Fame, Annual Meeting, and other connecting events).
TO APPLY FOR THE NONPROFIT RATE OR ENGAGEMENT FUNDS PLEASE EMAIL A ONE PARAGRAPH REQUEST TO INFO@GREATERMANKATO.COM or learn more details here:
First National Bank Minnesota is a full-service financial institution headquartered in St. Peter, Minnesota, with banking offices in Mankato, St. Peter, Gaylord, and Belle Plaine. Our primary geographic market covers a large area in south central Minnesota, including Nicollet, Blue Earth, LeSueur, Scott, Carver, and Sibley counties.
Over the last several months, businesses have been impacted by COVID-19 in many ways. Some industries have been impacted more severely than others. Across the board, businesses have had to act and adjust like never before. Joe Paulsen with Pinnacle Business Traction would like to help you with ensuring that your company has the Traction it needs to overcome current and future challenges.The following is part six of a guest blog series where Joe will share tips on how you can gain traction in difficult times.
Discipline and accountability will give your company the Traction it needs to survive or thrive in any environment. This is especially essential when navigating challenging times. You need to have the discipline of meeting regularly with your leadership team, reviewing and analyzing your scorecard metrics each week, reviewing your past quarter’s performance and forecasting your next quarter while learning from your past successes and mistakes. Accountability comes from helping and holding each team member responsible for their commitments, metrics and tasks. This will provide your organization the Traction necessary to be the best you can be allowing you to get everything you want from your business.
Joe Paulsen (Meet Joe) and Pinnacle Business Traction’s passion is to Enrich the Lives of Entrepreneurs and Business Leaders in the Mankato area. He has been implementing EOS since 2016 and has helped over 35 entrepreneurial organizations get everything they want from their organizations. Please reach out to him if you are wanting more information or assistance. joe@pbtraction.com GMG is offering the best-selling book Traction – Get a Grip on Your Business to members wanting to learn more about the Entrepreneurial Operating System. Please email jsprague@greatermankato.com to schedule a time to pick-up your free copy at the GMG office.
Over the last several months, businesses have been impacted by COVID-19 in many ways. Some industries have been impacted more severely than others. Across the board, businesses have had to act and adjust like never before. Joe Paulsen with Pinnacle Business Traction would like to help you with ensuring that your company has the Traction it needs to overcome current and future challenges.The following is part five of a guest blog series where Joe will share tips on how you can gain traction in difficult times.
Great companies are very good at solving their issues. They don’t conceal them or run away from them. They actually look for and encourage Issues because they know that they can solve them. The only issues they can’t solve are the ones they don’t know about. During the last ten months, Issues have been coming at us at an alarming pace. You can’t solve them all and some are more impactful than others. It is important to keep them in perspective by prioritizing the ones that must be solved and holding off on the ones that can wait to be solved the following week or quarter. Once you have prioritized the most urgent issues, we need to drill down to get to the root cause.
Many times when an issue is brought out, we discuss, explain, defend, commiserate, tell stories, but we rarely identify the true root cause of the issue. This is typically what consumes our time in our meetings and we never get around to actually solving the issue. I.D.S. is the EOS® Issues Solving Track™ that instills the discipline necessary to first Identify the root cause. This step will take more time at the front end, but it will ultimately save you time because your team won’t get distracted focusing on symptoms and telling stories that may not be relevant to the real issue. Once the root cause is Identified, then we move to Discussion. This ensures that everyone’s voice has been heard and to ensure that we are focused on the most probable root cause. Once there is agreement on the most probable root cause, we now list all possible Solutions.
Joe Paulsen (Meet Joe) and Pinnacle Business Traction’s passion is to Enrich the Lives of Entrepreneurs and Business Leaders in the Mankato area. He has been implementing EOS since 2016 and has helped over 35 entrepreneurial organizations get everything they want from their organizations. Please reach out to him if you are wanting more information or assistance. joe@pbtraction.com
GMG is offering the best-selling book Traction – Get a Grip on Your Business to members wanting to learn more about the Entrepreneurial Operating System. Please email jconsidine@greatermankato.com to schedule a time to pick-up your free copy at the GMG office.
Buying a house for the first time can be overwhelming, challenging and time-consuming. Starting the process with a Pre-Approval can you help you be one step ahead when you find a home you are interested in.
A Pre-Approval allows you to focus in on what you need to do to be ready to buy a home before you start looking at houses. The Pre-Approval process can be done online, in-person or via a phone call. You will be asked to provide information on the following items:
Income/ Employment
Assets/ Debts
Residency information
Consent for credit check
Your choice lender will run a credit check to see what type of loan programs you may qualify for.
