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Updated: Biden Administration Announces Creator-Friendly Changes To The Paycheck Protection Program

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The Biden Administration announced welcomed changes to the Paycheck Protection Program, increasing aid to music creators
Matthew Bango
Advocacy
Feb 24, 2021 - 11:45 am

UPDATE: This article, originally posted on Feb. 24, 2021, has been updated with new information for music makers and music small businesses based on the recent passage of the American Rescue Plan, and new regulatory updates by the Small Business Administration.  Importantly, effective March 3, self-employed individuals (including independent contractors, gig workers, and sole proprietors) will be eligible for an increased PPP loan amount based on their gross income. Per the SBA, this change is limited to applicants who had yet to be approved for a loan as of March 3.

Additionally, per the American Rescue Plan, eligible businesses may now apply for both a PPP loan and a Shuttered Venue Operators Grant (SVOG). Previously, potential applicants for SVOGs were prohibited from applying for assistance from programs. Under the new law, the PPP loan will offset the potential amount of an SVOG. The SVOG program will open for applicants on April 8, and PPP remains open for all small businesses until May 31.

Please contact advocacy@grammy.com with any questions.

The Biden Administration and Small Business Administration (SBA) announced new changes to the Paycheck Protection Program (PPP) on Monday, February 22, which will result in increased access to essential financial relief for the creative workforce.  Formed as part of the CARES Act, the PPP has enjoyed tremendous bipartisan support due to the program’s ability to quickly deliver relief to qualified small businesses, including sole proprietors and independent contractors. The PPP administers favorable loans to eligible borrowers through participating financial institutions, and many of the loans convert to grants if they are primarily used to fund payroll expenses.

While the relief program is appreciated and utilized by the music community, many struggling creatives were originally left with either limited or no access to the available loans administered by the SBA. But starting today, the SBA attempts to correct these inequities and other longstanding programmatic flaws by implementing new guidance.

Many creators will be directly impacted by the SBA’s updated funding formula for sole proprietors, independent contractors, and self-employed individuals. Previously, the PPP loan was calculated by multiplying an applicant’s payroll expense by 2.5, resulting in a much lower loan for sole-proprietors compared with larger businesses. Under the updated guidance, the SBA will calculate the loan amount for these types of workers by using gross income instead of net profits, resulting in larger payments for many members of the music ecosystem. This change is effective March 3, and applicable to applicants who have yet to be approved for a PPP loan in 2021. The Recording Academy has consistently advocated for this change since March, 2020, which will help make PPP loans more responsive to the needs of self-employed individuals.

From the program’s inception, many minority-owned businesses and businesses located in underserved communities faced difficulty accessing loans due to a lack of a formal pre-existing relationship with large financial institutions. To correct that program, the SBA has earmarked $1 billion in funds for low- and moderate-income areas. While this is a step in the right direction, the Biden Administration and the SBA must continue to increase outreach and assistance to these underserved communities and minority-owned institutions.

The SBA also prioritized getting relief to businesses with 20 employees or less, which started on February 24 and concluded on March 9, 2021. Previously, these businesses struggled to secure PPP funds due to the overcrowded lending portal. Understanding that many businesses in the music ecosystem are extremely small operations, the Academy has long advocated for the SBA to prioritize the delivery of financial relief to the smallest of businesses, many of whom are on the verge of collapse due to the pandemic’s enduring impact.

Other changes in guidance include the elimination of borrowing restrictions for business owners with non-fraud felony convictions, the removal of the disqualifying federal student loan debt delinquency factors, and the expansion of the program to qualify all lawful U.S. residents. Learn more about the application process on the SBA’s website. 

While many of these promising changes will positively impact the entire music ecosystem, Congress understood the need of providing additional relief and passed President Biden’s “American Rescue Plan” as a result. The relief package addresses the many complex challenges facing creators by extending unemployment assistance, appropriating funds to help small businesses survive, and investing in the National Endowment for the Arts (NEA). The Academy applauds President Biden and Congress on the passage of this landmark bill, and looks forward to collaborating on an equitable and seamless implementation of these critical relief programs, many of which will greatly assist the entire music ecosystem.

Editor’s Note: This article was originally published in February 2021 and has been updated to reflect the passage of the American Rescue Plan end of the 14-day exclusive application window.

Read More: Billboard: How The Recording Academy And Its Allies Scored Big Wins In COVID Relief Package

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The CARES Act: A Retrospective One Year Later

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After intense advocacy by Recording Academy members, Congress intervened to bolster a cratering economy by passing the bipartisan and bicameral CARES Act, an achievement to celebrate a year after its passage
Matthew Bango
Advocacy
Apr 15, 2021 - 9:03 am

On March 27, 2020, after significant input and backing by the Recording Academy and other organizations, Congress intervened to bolster a cratering economy by passing the bipartisan and bicameral Coronavirus Aid, Relief, and Economic Security (CARES) Act. A $2 trillion stimulus package, the CARES Act was designed to temporarily stabilize the economy and safeguard ties between workers and their employers, including those in the music industry. Now more than one year into the pandemic, let’s look back and celebrate the CARES Act on the first anniversary of its passage, which has proved to be a pivotal lifeline for many music creators.

The CARES Act established innovative relief programs, extended unemployment insurance eligibility to music creators historically excluded from assistance, and appropriated funds to directly support the arts community. With input from the Recording Academy, Congress implemented the Paycheck Protection Program (PPP) to provide relief for self-employed workers and small businesses, passed an unprecedented and historic expansion of unemployment benefits, known as Pandemic Unemployment Assistance (PUA), for gig workers, freelancers, and other self-employed music professionals, and appropriated $75 million in supplemental funding for the National Endowment for the Arts. These programs, and more, gave direct influx of cash to music creators and small businesses at the onset of the pandemic.

Amongst the initial rush of implementation of the CARES Act, many music creators questioned how to best navigate this new relief programs. Recognizing the need for greater assistance within the music ecosystem, the Recording Academy hosted a webinar on how to best navigate the relief landscape and established the “CARES Act Hotline” to answer individual questions. These resources directly assisted hundreds of music creators to accurately apply for a PPP loan and navigate complex unemployment insurance scenarios. 

Future advocacy work then focused on fixing technical problems as they were identified. For example, many “mixed earners,” those with both traditional and freelance income, found themselves to be ineligible for certain unemployment programs due to oversights included in the CARES Act and the antiquated state unemployment systems. Additionally, many small businesses had difficulty accessing PPP money before the program exhausted funding. 

The Recording Academy identified solutions to many of these problems, and shifted gears to ensure relief truly worked for the music ecosystem. Many of these proposed technical corrections were passed as standalone bills, included in subsequent relief packages, or addressed administratively, including extending the PPP application window, establishing a supplemental fund for mixed earners, and improving the PPP formula for self-employed workers, among others.

And as chronicled by Billboard, the Recording Academy and its members didn’t stop with short-term fixes but continued to advocate for long-term solutions to ensure a full recovery for music creators. As part of a year-end spending deal, the Recording Academy and its allies in the music ecosystem secured funding for several creator-friendly legislative priorities, including expanding pandemic unemployment assistance programs for eligible self-employed workers, establishing a $15 billion supplemental fund to assist live music venues, and replenishing SBA loan programs for independent contractors and small businesses, among others. The Academy and its members also managed to secure necessary guidance changes and funding for the SBA relief programs, and an additional extension of unemployment programs for gig workers, self-employed individuals, and mixed earners as part of the American Rescue Plan, which was signed into law in March 2021.

This past year has proven to be physically, emotionally, and mentally difficult for all Americans, and music creators have been particularly impacted by the pandemic. Unable to access traditional income streams and distant from their community, many creators have been left wondering where their next paycheck will originate from or when their next opportunity to reunite with their beloved bandmates will occur. While this year has tested the entire music ecosystem, our ability to stand united behind a shared cause has resulted in tremendous legislative accomplishments.

While our fight against the COVID-19 pandemic started with the CARES Act, we must continue to pressure Congress in support of long-term solutions geared at recovery, including securing the passage of the HITS Act and ensuring the swift implementation of the Shuttered Venue Operators Grant. As always, the Recording Academy and its members will continue to champion legislative solutions to establish a more equitable and creator-friendly music ecosystem.  

Take Action: Ask Congress to Pass the HITS Act

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Breaking Down The Mixed Earner Unemployment Compensation Program

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The latest COVID relief package included the Mixed Earner Unemployment Compensation program. How does the MEUC help creators?
Matthew Bango
Advocacy
Jan 13, 2021 - 2:10 pm

When drafting the latest COVID-19 relief package, Congress had music creators in mind when designing the new Mixed Earner Unemployment Compensation (MEUC) program. Signed into law by the President on December 27, 2020, the MEUC program provides "mixed earners," those with both traditional and freelance income, an additional $100 per week benefit if the worker received W2 wages and at least $5,000 in self-employment (such as 1099) income during the latest taxable year. 

The MEUC program is still being implemented across the country, with 50 states and territories soon to make the program accessible to mixed earners in need. Claimants will need to provide documentation in order to qualify for the new benefit, and each participating state and territory will soon offer full guidance to potential recipients.

This enhanced unemployment benefit is in addition to the Federal Pandemic Unemployment Compensation (FPUC) program, which was reauthorized as part of the same COVID-19 stimulus package. The FPUC provides $300 per week in additional unemployment benefits for all individuals receiving unemployment assistance until March 14. All told, mixed earners could soon qualify for an additional $400 per week on top of their existing state unemployment benefit amount.

The Recording Academy has long urged policymakers to remedy the diminished unemployment benefit received by mixed earners following the rollout of the CARES Act. With support from the Academy, Reps. Adam Schiff (D-Calif.) and Judy Chu (D-Calif.) and Sens. Mark Warner (D-Va.) and Tina Smith (D-Minn.) introduced the Mixed Earner Pandemic Unemployment Assistance Act (H.R.7691/S.4442). The legislation aimed to fix this unintentional problem caused by the CARES Act, and ensure that all workers have equitable access to the maximum possible support in future unemployment benefit programs.

Rep. Schiff recently noted the problems facing mixed earners in an interview with The Hollywood Reporter. Schiff said early on in the pandemic he became aware that "those with mixed income were getting a lot less, in some cases not getting anything at all, because their unemployment was based on their W-2 and most of their income was from 1099s." Schiff, whose L.A. district covers many mixed earners employed in the music, film, and arts industries, also pledged to work with "the new administration when there's work on a new package to try to make sure that benefits to mixed-income workers continue."

The Recording Academy will continue to advocate for extended and improved unemployment benefits for music makers in need, and offer guidance to applicants navigating the unemployment system. Please visit MixedIncome.org to learn more about the MEUC and eligibility.

Recording Academy And Music Community Coalitions Continue Advocacy For COVID-19 Relief

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Small Business Association To Wind Down Paycheck Protection Program, Ending Historic Relief Program

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As part of a massive revamp, the SBA is winding down the end of the nearly $1 trillion PPP while setting up an online loan forgiveness process. Here's how you can access it
Morgan Enos
Advocacy
Jul 28, 2021 - 3:09 pm

The Paycheck Protection Program helped buoy millions of small businesses during the COVID-19 pandemic—and now it's coming to an end.

As Politico reports, the Small Business Association (SBA) on Wednesday announced the beginning of the end of the historic, nearly $1 trillion program, announcing in its stead an online loan forgiveness platform that will accept applications from small borrowers.

This initiative will encourage borrowers with loans of $150,000 or less — accounting for more than 90 percent of the pandemic-era program — to apply for loan forgiveness.

The ability to turn PPP loans into grants in exchange for maintaining payroll was a key component of the small business rescue initiative. However, nearly 7 million of those loans have not been forgiven.The SBA's new platform will accept applications from small borrowers directly in a format that officials estimate will take businesses just a few minutes to go through.

What's more, they plan to spare certain borrowers who received second PPP loans this year worth less than $150,000 from having to supply documentation proving that they suffered a 25 percent revenue reduction in 2020 that was required to receive the aid.

The SBA plans to launch the site on a pilot basis on Wednesday (7/28) and have it go live around August 4. This development will be germane to many music creators, who may be considered sole proprietors, independent contractors, or self-employed businesses—which is exactly who the PPP was aimed at in the first place.

Last February, the Biden Administration and SBA jointly announced changes to the PPP, adding increased access to essential financial relief for the creative workforce. Formed as part of the CARES Act, the PPP has enjoyed overwhelming bipartisan support due to its ability to rapidly deliver relief to qualified small businesses, sole proprietors and independent contractors. 

While the PPP will soon be a thing of the past, the Recording Academy's Advocacy wing urges those still in need to access the upcoming portal and pursue PPP loan forgiveness if they meet the qualifications.

Updated: Biden Administration Announces Creator-Friendly Changes To The Paycheck Protection Program

American Music Fairness Act

Reps. Darrell Issa (L) & Ted Deutch (R)

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American Music Fairness Act Builds Support In Washington & With Local Radio

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Since the American Music Fairness Act (AMFA)'s launch in June, it's only gained support from lawmakers and even radio broadcasters—and this progress shows no sign of slowing
Morgan Enos
Advocacy
Jul 8, 2021 - 8:09 am

It's been only a matter of weeks since Representatives Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act (AMFA), a new bill to ensure that artists, performers, producers, and music creators are fairly compensated when their songs are played on terrestrial radio stations. 

Deutch and Issa are far from alone in this undertaking, though—and the growing list of supporters in the political and broadcasting centers is constantly growing.

In addition to Deutch and Issa, Reps. Jerry Nadler (D-N.Y.), Tom McClintock (R-Calif.), Karen Bass (D-Calif.), Diana Harshbarger (R-Tenn.), and Judy Chu (D-Calif.) have co-sponsored the bill. Notably, Congressman Nadler is the Chairman of the House Judiciary Committee—where the bill was referred—and has long been a vocal champion to establish a performance right.

The bill has garnered strong support across the music industry, including from organizations like the American Federation of Musicians, the Future of Music Coalition, the musicFIRST Coalition, RIAA, SAG-AFTRA and SoundExchange. And even the AFL-CIO—the largest federation of unions in America—has endorsed it.

As the AFL-CIO's President Department for Professional Employees, Jennifer Dorning, put it in a statement, "Now is the time for Congress to close a loophole that has prevented union creative professionals from earning fair compensation when their songs are played on terrestrial radio."

Despite the expected and misleading opposition from the National Association of Broadcasters (NAB)—who represent conglomerates like iHeart Radio and Audacy— groups representing truly community-owned broadcasters have also come out to support the AMFA, including the Alliance for Community Media, Common Frequency, the National Federation of Community Broadcasters, Media Alliance, Prometheus Radio Project and REC Networks. The support of community radio undermines one of NAB’s misleading arguments that paying artists would bankrupt local stations.

But, that couldn’t be further from the truth. As the small broadcast organizations noted in their support for the American Music Fairness Act, the bill contains important protections for small and non-profit broadcasters to ensure that local and community-supported radio stations can continue to be diverse and thrive. Because small radio stations deserve to be treated differently than Big Radio groups like iHeart, the AMFA protects radio stations that fall under a $1.5 million in annual revenue and whose parent companies make less than $10 million in annual revenue overall. Under the bill, some stations would pay as little as $10 a year for unlimited music!

And naturally, many artists remain on board in support of securing a performance right. From legacy acts like Dionne Warwick and Sam Moore—who travelled to Washington to advocate for the bill at its introduction—to the vocal Academy members who have reached out to Congress in support, it is clear that artists are fed up with the status quo and are ready to fight for real change.

On top of that, according to the musicFIRST Coalition, a majority of Americans support the proposed changes in the American Music Fairness Act as they believe it's unfair that artists are not paid when their music is played on traditional radio; with Americans believing that Congress should side with artists not radio by a 20 point margin.

Despite the growing support for the American Music Fairness Act, Big Radio and the NAB are not backing down and they remain a formidable roadblock in Washington. If you wish to join this fight in support of artists, you can contact Congress here.

Why The American Music Fairness Act Will Give Music Creators What They Deserve