How to access $ 350 billion in emergency funding from state and local governments
Federal Covid-19 assistance programs may be winding down or, in the case of the Paycheck Protection Program, there is a good chance your business will still need help.
Half of the nation’s smallest businesses continue to struggle with the economic impacts of the pandemic, according to a June report from Yahoo Small Business. The survey also found that only 38% of microenterprises – defined as those with fewer than five employees – received government support during the pandemic, with 85% saying they were relying on community help to keep them going. flow.
If your business is still in need of financial support, consider using state and regional small business assistance programs. Many of these programs were started at the start of the pandemic, but they still have funds available. The American Rescue Plan Act, which President Biden enacted on March 11, 2021, allocates $ 350 billion to states, communities, territories and tribal governments to help eligible residents. Of this amount, $ 195.3 billion goes directly to the states.
According to the National League of Cities, a municipal advocacy group, funds for local governments will remain available until December 31, 2026, but will only be able to offset costs incurred by December 31, 2024. While states may choose to deploy the money in different so about 30 states, including Utah and Georgia, use it to fuel small business relief efforts, mostly in the form of loans or grants. Some states also offer to connect founders with resources or mentorship.
Wolf’s Ridge Brewing, a pub and restaurant in Columbus, Ohio, received approval for a $ 10,000 grant through the state’s Bar and Restaurant Assistance Fund in November 2020 after the company was forced to lay off most of its staff of 77 people. Co-founder Bob Szuter said the aid program, which ended in January 2021, was no small change. “The total amount was not significant relative to the size of our business, but it certainly helped during a difficult time in 2020 when we weren’t sure when and if there would be additional federal support,” Szuter said. .
Different states, different rules
Each national and local program is unique and offers different eligibility requirements, potential rewards, and income loss thresholds. Some programs require businesses to show certain revenue loss thresholds or proof that they have to go out of business. For example, businesses in Grand Junction, Colorado, can access up to $ 7,500 in grants, but must demonstrate that the company has been forced to shut down or significantly limit its operations due to the pandemic. New York provides grants based on an entity’s annual gross revenue for 2019, with a maximum of $ 50,000. Connecticut provides one-time grants of $ 5,000 to businesses with fewer than 20 employees or with a 2019 payroll of less than $ 1.5 million.
Other states offer both grant and low-interest loan programs, generally defined as loans with an interest charge of less than 5%. The Arizona Small Business Success Loan Program offers loans of up to $ 75,000 with repayment terms ranging from six months to five years. Likewise, the Illinois Small Business Emergency Loan Fund provides businesses with fewer than 50 workers and less than $ 3 million in low-interest loans of up to $ 50,000. At least 50 percent of loan proceeds must be used for payroll or other eligible compensation, including wages, salaries, tips, vacation pay, and group benefits.
While these programs may still have plenty of funds available – some don’t even have an application deadline – you had better act quickly. Many programs accept applications on an as-and-when basis until funds are exhausted. That’s why it’s best to file your claims as soon as possible, says Tom Sullivan, vice president of small business policy for the US Chamber of Commerce, who has tracked state programs throughout. of the pandemic. But follow them, he said. Although all 50 states receive some of the funding for the bailout, the timing of disbursements may be different in each state.
Namely, the timing of the second tranche of funding provided to states through the bailout depends on the local unemployment rate. According to the Treasury Department, states that experienced a net increase in the unemployment rate of more than 2 percentage points from February 2020 to the last available certification date will receive their full allocation of the remaining funds in a single payment around May. 2022. The other states will receive funds in two separate and equal installments.
With this, some states, counties and cities might choose to establish new programs in the near future, Sullivan explains. Governments must apply through the treasury, and those requests are now being processed, he said. He recommends contacting your local chamber or local economic development center first, as these institutions may pay special attention to the deployment of funds.
Before contacting a local service or seeking help, it’s critical to have your financial documents in order, Sullivan notes. This includes annual or quarterly income statements and tax documents. “Every city and every county is usually a little different,” says Sullivan, “but the people who get their business first usually have the preference.”