Government Funding Options for Small Business Owners in 2021

The pandemic did a number on small businesses across the United States. The world literally screeched to a halt as stay-at-home and business shut-down legislation was put in place. The Small Business Administration (SBA), a government agency founded to support small businesses, stepped up to offer fully forgivable loans through the Paycheck Protection Program (PPP). Although that program has ended, it’s clear that low-cost funding is still needed.

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If you are rebuilding your business or have plans for future growth, investigate the options below to determine if this funding would be a fit.   Here’s information on the Employee Retention Credit, Shuttered Venue Operators Grant, Restaurant Revitalization Fund, and the SBA 7(a) loan program.

What Is Employee Retention Credit?

If you qualify for the PPP program, there is a high probability you qualify for the ERC. The Employee Retention Credit (ERC) is a credit directly to small businesses, passed by US Congress in late 2020 and applies to businesses below 500 employees. If qualified, the business will receive a direct payment from the IRS. PLEASE NOTE: This is not a loan or a grant. This is the Federal Government providing direct payments to your business based on payments you have already made to your employees.

Small business example:  If you have 10 employees and qualify for the max of $33,000 per employee, you will receive $330,000 in direct payments from the Federal Government via the IRS.

If you have 50 employees and qualify for the max of $14,000 per employee, you will receive $700,000 in direct payments from the Federal Government via the IRS.

What is the Restaurant Revitalization Fund (RRF)?

The American Rescue Plan Act established the RRF to provide funding to help restaurants and other eligible businesses keep their doors open. This program will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. On June 8, 2021, a bipartisan group of Senators and U.S. Representatives introduced the Restaurant Revitalization Fund Replenishment Act of 2021. The legislation would replenish the RRF with a $60 billion second round of restaurant relief.

Eligible entities who have experienced pandemic-related revenue loss include:

  • Restaurants
  • Food stands, food trucks, food carts
  • Caterers
  • Bars, saloons, lounges, taverns
  • Snack and nonalcoholic beverage bars
  • Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
  • Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
  • Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
  • Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
  • Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products

You can apply through SBA-recognized Point of Sale (POS) vendors or directly via SBA in an online application portal. Participating POS providers include Square, Toast, Clover, NCR Corporation (Aloha), and Oracle. If you are working with Square or Toast, you do not need to register beforehand on the application portal.

Registration with is not required. DUNS or CAGE identifiers are also not required.

SBA Form 3172


Long Term Government Loan

Although the Paycheck Protection Program (PPP) offered some relief for payroll and utilities, the use of funds is very restricted in order to receive full forgiveness. When those funds run out, what are the options available now? The SBA 7(a) program can provide funding businesses need to keep operations running.

You might have heard SBA 7(a) loans are the gold standard for small business owners who want to expand. It’s true. Funds from these loans can be used in a multitude of ways to help a small business.

Use of Proceeds for SBA 7(a) loans

If you’ve secured a Paycheck Protection Program (PPP) loan, you probably know that there are strict use guidelines to qualify for forgiveness. SBA loans are extremely flexible and can be used for a multitude of purposes.

  • Working Capital – Purchase equipment, increase inventory, add marketing programs, use for operating expenses or to hire additional staff.
  • Debt Consolidation Loans – Refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans or business credit cards.
  • Commercial Real Estate – Refinance an existing commercial real estate mortgage, buy an office building or other owner-occupied commercial space.

The SBA sets a cap on the interest rates that lenders can charge. It breaks down into a base rate plus an additional percentage based on the loan amount and the repayment term. Many lenders use the Prime Rate as the base, which is set quarterly by the Federal Reserve.

Rates for an SBA 7(a) loan from banks in the SmartBiz network as of August 2020 are 4.75% - 7.00% with a variable rate of Prime Rate plus 1.5% to 3.75%.

7(a) loan interest rates can also be fixed or variable. Fixed means that the rate remains unchanged throughout the life of the loan, while a variable rate can be updated regularly.


The interest rate is not the only charge associated with 7(a) loans, which is why it’s helpful to check the APR (Annual Percentage Rate) as well. You’ll probably be responsible for a guaranty fee paid to the SBA.  In addition, you might encounter origination fees, packaging fees, and other closing costs. Even with these fees and other costs, SBA 7(a) loans are still a better deal than most small business loans.

Connect with an SBA Loan Lender

Avoid going from bank-to-bank to find a lender who will approve your application. When you work with SmartBiz Loans, we’ll help you increase your chances of getting a “Yes” by matching you with the bank partner most likely to fund your unique business profile. See if you prequalify by answering a few questions about your business and you’ll be on your way to applying for quick, easy, and transparent funding.

For additional information about SBA 7(a) loan applications, review this article from the SmartBiz Small Business Blog: 4 Ways to Prep for a Stellar Small Business Loan Application.

Shuttered Venue Operators Grant

The Shuttered Venue Operators Grant (SVOG) program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, and amended by the American Rescue Plan Act. The program includes over $16 billion in grants to shuttered venues, to be administered by SBA’s Office of Disaster Assistance.

Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.

For a list of FAQs about the SVOG, download this PDF from the SBA’s official website: Shuttered Venue Operators Grant Frequently Asked Questions