The $1.9 trillion American Rescue Plan (ARP) of 2021, mostly known for the $1,400 payments to individuals earning up to $75,000 and couples earning up to $150,000, extends several benefits to business as well. Most important for the owners, managers, and shareholders of winter sports businesses are provisions that include the following:
Small business financing program. Creators of the ARP hope to leverage $35 billion in government funds into $175 billion in additional small business lending and investment by funding successful state, local, tribal, and non-profit small business financing programs. The goal is to provide low interest loans and venture capital to help entrepreneurs—including those in the clean energy sector—innovate, create, and maintain jobs and provide the essential goods and services that communities depend on.
The Payroll Protection Program. Already taking applications for second-round loans, the Paycheck Protection Program (PPP) got an additional $7.25 billion. Seasonal businesses are eligible for program loans even if the business was dormant or not fully operating on Feb. 15, the primary PPP loan eligibility date. Instead, if the business was operating for any 12-week (up from the previous 8-week) period between Feb. 15, 2019, and Feb. 15, 2020, it is eligible for a PPP loan.
Although the latest round of funds is just a small fraction of the amounts allocated for PPP in previous legislation, new rules allow more non-profits to apply for loans designed to help borrowers meet their payroll and operating costs and can, potentially, be forgiven. And, while the PPP loan application process is slated to soon end, Congress is pressing for an extension because of the large amount of unexpended funds, giving mountain resort and touring center businesses until the end of May to apply.
The Emergency Injury Disaster Loan Program. The ARP earmarks $15 billion to the Emergency Injury Disaster Loan (EIDL) Program, which provides long-term, low-interest loans from the Small Business Administration (SBA). Severely impacted small businesses with fewer than 10 workers will reportedly be given priority for some of these funds.
Restaurant Revitalization Fund. The ARP also provides $25 billion for a new grant program specifically for bars and restaurants. Eligible are “restaurants, food stands or trucks, food carts, caterer, saloon, inn, tavern, bar, lounge, brewpub and more where patrons assemble for the primary purpose of being served food or drink.”
Although eligible businesses can receive up to $10 million to be used for a variety of expenses including payroll, mortgage and rent, utilities and, of course, food and beverages, not everyone is eligible. Specifically excluded are state or local government-operated businesses, publicly-traded companies, any business with 20 or more locations, or that has applied for or already been granted funds from other programs.
Workplace Safety. The ARP provides $150 million to the U.S. Department of Labor to carry out worker protection activities related to the Covid-19 pandemic.
Community Navigator Services has been funded to the tune of $100 million to provide outreach, education, and technical assistance with the SBA’s programs. Community Navigators, community organizations, or community financial institutions provide services to women-owned businesses as well as those owned and operated by veterans or the socially and economically disadvantaged.
Employee Retention Credit. To encourage employers to keep workers on their payroll, last year’s CARES Act created the Employee Retention Credit (ERC). The ERC allows 70 percent (up from 50 percent) of a ski area business’s qualified wages to be immediately refundable via reductions in the required employment tax deposits.
Paid Sick and Family Leave. Last year, lawmakers guaranteed two weeks' pay to many workers quarantining because they contracted Covid-19. They also provided an additional 10 weeks of paid family leave to those staying home with children whose schools were closed. Although these benefits expired in December 2020, ARP will allow tax credits for wages voluntarily paid through Oct. 1, 2021.
Obviously, these provisions are only a small part of the overall ARP. There are many more items included in the bill, one of the largest relief measures Congress has ever considered. Professional guidance will be required to maximize the benefits any ski area operator may wish to explore.
Special report prepared by Mark E. Battersby