Arts Blog

PPP, Unemployment, Oh My: GPAC Breaks Down the Latest Stimulus Act for the Arts

A new $900 Billion Stimulus Act was finally signed into law late last year. This new Stimulus Act has included several important provisions for artists and arts groups. It may feel overwhelming to wade through all of the benefit and assistance programs, PPP funding, and new support for performance venues. That's why our Manager of Volunteer Services, Larry Castner, Esq., broke it down for you.

Questions about how this stimulus package might affect you? Reach out to Larry anytime at lcastner@pittsburghartscouncil.org, and he or another qualified legal or business volunteer will help you.

Unemployment Compensation

The New Stimulus Act extended pandemic related unemployment compensation benefits for up to 11 weeks. The extended UC benefits will expire April 5, 2021 for those applicants receiving benefits as of March 14, 2021 and who have not reached the maximum number of weeks of benefits.

  • Pandemic Unemployment Compensation (FPUC): Provides for a $300/week supplement to regular state unemployment payments for up to 11 more weeks.
  • Pandemic Unemployment Assistance (PUA): Extends unemployment compensation benefits for gig workers and independent contractors for up to 11 weeks. However, retroactive payments are limited to weeks after December 1, 2020.
    • Those individuals receiving PUA as of January 31, 2021, must submit documentation substantiating employment or self-employment within 90 days.
    • Effective January 31, 2021, new applicants for PUA must submit documentation to substantiate their employment or self-employment within 21 days.
  • Pandemic Emergency Unemployment Compensation (PEUC): Extends unemployment benefits for those who had previously exhausted their weeks of unemployment compensation eligibility for up to 11 weeks.
  • Mixed Earner Unemployment Compensation (MEUC): The new Stimulus Act also provides a new supplemental payment of $100/ week payment for certain workers who have at least $5,000 a year in both regular wages as well as self-employment income but whose mixed income sources may have impacted their qualification for unemployment compensation.

More details and applications for unemployment compensation can be found on the Pennsylvania Department of Labor & Industry’s website. Information about MEUC can be found online.

A New Round of PPP Funding

The new Stimulus Act provided $284 Billion for new or supplemental Paycheck Protection Program (PPP) forgivable loans.

Eligibility

  • First Time Borrowers: First-time PPP borrowers are subject to the same PPP eligibility rules established under the CARES Act including that the borrower must have been in operation on February 15, 2020.
  • Second Time Borrowers: Organizations that have exhausted their first PPP funds can apply for a second forgivable PPP loan of up to $2 million. However, the borrower must have fewer than 300 employees and have experienced at least a 25% reduction in grows receipts during a quarter in 2020 as compared with the same quarter in 2019.

Amount

  • Forgivable loans equal to 2.5 times the applicant’s average monthly payroll costs for 2019
  • The maximum PPP loan amount that can be awarded during this new round of PPP funding is $2 million

Uses

  • At least 60% of the PPP funds are to be used for payroll.
  • Other eligible expenses include:
    • Rent and mortgage interest
    • Payments for necessary business software or cloud computing services
    • Sales and accounting expenses
    • Costs related to property damage due to public disturbances that occurred during 2020 that were not covered by insurance or other compensation
    • Costs incurred in connection with compliance with COVID-19 related health and safety guidelines, including sanitation standards, social distancing requirements.

Process

Applications for PPP loans will still be submitted to eligible PPP funders. The Small Business Administration will continue to administer the PPP loan process. The SBA still needs to issue new rules and applications for this further round of PPP loans. New applications for PPP loans will not be accepted until later in January of 2021. It is expected that applications must be submitted before March 31, 2021. A one-page application for PPP loan forgiveness is to be created by the SBA for PPP loans of $150,000 or less.

New Help for Performance Venues

The “Save our Stages” Act

The new Stimulus Act provided $15 Billion in grant funding to live performance venues through a new program often called the “Save our Stages” Act.

Eligibility

  • Must have had an operational live performance space as of February 29, 2020 and either be open or intend to reopen
  • Must be primarily operated by paid employees, not volunteers
  • Must charge for most performances and provide the performers fair compensation
  • Must show at least a 25% loss in revenue during a quarter in 2020 as compared to the same quarter in 2019
  • Grantee cannot:
    • Have obtained a PPP loan
    • Be listed on a national securities exchange
    • Receive more than 10% of gross revenue from federal funding, excluding certain emergency and disaster relief funding
    • Have been awarded an 7(a) SBA Loan
    • Present depictions, displays or performances of an excessive sexual nature
    • Have all three of the following:
      • Own a venue or operated in more than one country
      • Own a venue or operate in more than 10 states
      • Employed more than 500 employees as of February 29, 2020

Amount

  • There is a total of $15 Billion available for this new Save our Stages funding program. At least $2 Billion has been reserved for smaller businesses (i.e., 50 or less employees).
  • Save our Stages funding will be for the lesser of 45% of the applicant’s gross revenue in 2019 or $10 million.
  • If funding is still available, a second round of funding may open starting April 1, 2021. The amount of these further grants will be limited to $2 million.
  • The maximum amount that can be awarded to any one applicant is $10 million.

Uses

  • Payroll as well as payments of up to $100,000 to independent contractors
  • Marketing and advertising
  • Administrative costs including fees and licensing costs, state and local taxes, and insurance
  • Costs of providing PPE
  • Capital expenses for live performances
  • Utility bills & maintenance expenses
  • Certain mortgage and other debt obligations but not for the purchase of real estate or for repayment of loans obtained after February 15, 2020
  • Cannot be used for donations to political parties or candidates

Process

Grants will be administered by the Small Business Administration. It is likely that applications will not be accepted until April 1, 2021 because the SBA needs to prepare the rules and applications for this new program.

The National Independent Venue Association has a good summary of the Save our Stage Act provisions and is closely following the roll out.