Author: Jennifer Ortakales Dawkins
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On Sunday, the Senate released its revised $1 trillion infrastructure bill, which President Joe Biden and a bipartisan group of senators agreed upon last week. One major change from Biden’s original proposal deducts $31 billion in pandemic relief funding aimed at hard-hit small businesses.
So far, the small-business provisions in the new $550 billion bill appear remarkably different from Biden’s original $2 trillion proposal. For example, there’s no mention of the previous plan to include $300 billion for small businesses and manufacturing, with initiatives to bring more manufacturing stateside, along with updated tax incentives and expanded research and development, showed the White House fact sheet released on July 28.
The bill is set to go to the House for approval before Biden would sign it into law.
We’ll continue to update this post as we learn more about the bill and how it could address small-business concerns.
$31 billion in funding cut from emergency small business loans and grants
If passed, the revised infrastructure bill would eliminate a $13.5 billion investment in the Economic Injury Disaster Loans (EIDLs), a 60-year-old program providing small businesses with low-interest loans during crises such as the current pandemic.
In April, the Small Business Administration (SBA) raised the cap on EIDLs so businesses could get up to $500,000 instead of the previous maximum loan amount of $150,000. As of July, the SBA has approved more than $236 billion in EIDL loans for 3.8 million businesses battling the pandemic, according to data reported by the government agency.
The proposed legislation would also scale back $17.6 billion in funding for the EIDL program’s loan advances which issued grants to hard-hit businesses in low-income areas.
For more information on Economic Injury Disaster Loans, read our guide here.
Ending employer tax credits
The proposed bill would end the Employee Retention Tax Credit (ERC), a provision Congress expanded in last December’s pandemic relief bill. The ERC provides up to $14,000 per employee for eligible businesses in 2021, an increase from $5,000 in 2020.
For more information on the employee retention tax credit, read our guide here.
America’s $65 billion investment in high-speed internet
The revised infrastructure plan includes a $65 billion investment in high-speed internet with the goal of increasing access for all Americans. Currently, more than 42 million Americans don’t have access to broadband internet, according to a May 2021 report by BroadbandNow Research.
This provision could create opportunity for entrepreneurs as e-commerce is booming as a low-cost entry into entrepreneurship. Cities such as Chattanooga, Tennessee, the first US city to reach gigabit speeds citywide, prove that democratizing quality internet access generates more jobs and business creation.
What’s more, the provision could level the playing field for those historically without access to high-speed internet. Seventy-two percent of Black business owners reported that having a business website helped them during COVID-19, according to a survey by GoDaddy Venture Forward.
Marcus Shaw, CEO of a nonprofit startup accelerator in downtown Chattanooga, previously told Insider that high-speed internet is the natural resource of the 21st century, essential for any local community to become a viable place to learn, work, and do business.
For more information on how Biden’s $2 trillion infrastructure plan addressed small businesses, read our coverage of his bill, proposed in April, here.
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