In the wake of the recent economic crisis resulting from the COVID-19 outbreak, many state and city governments have come together to provide relief to small businesses and not-for-profits that have been hit the hardest during the pandemic. We have been tracking these kinds of programs and while they share many similarities, they have just as many differences.
We have seen grants and loans as small as $500 and as large as $100,000. Several programs give preference to bars, restaurants and the hospitality industry, while others are open to any organization that can demonstrate they need funding assistance. There are even programs designed to help provide money to musicians, actors and employees within the gig economy.
Without fail, all of these programs have been extremely popular. In many circumstances, applications have already closed, with some cities promising a second round of funding in the near future. As the federal stimulus package makes its way to the state and city coffers, we expect to see more relief programs and possibly even modifications to current programs to make them more robust.
Below, we highlight several real examples of funding programs to provide some insight into what these cities are doing to establish some best practices related to crisis relief.
- Birmingham, Alabama – Birmingham was one of the first cities to create a successful relief program – BhamStrong Fund – however, they have already closed applications. The city offered a 180-day, zero-interest loan to small businesses with fewer than 50 employees, with a cap of $25,000 per loan. The application was a simple one-page, online form that could be completed in less than 10 minutes.
- Atlanta – Atlanta has established a $1.5 million, zero-interest loan fund called the Business Continuity Loan Fund (BCLF) for small businesses who lack working capital/cash flow.
- New York City – New York City has created several different programs to help multiple kinds of small businesses in the city. They include:
NYC Small Business Continuity Loan Fund – Up to $75,000 to help mitigate lost profits due to COVID-19. Companies must have fewer than 100 employees and a sales decline of at least 25%
NYC Employee Retention Grant – For companies with fewer than five employees, a grant is available to cover 40% of payroll costs for two months
NYC COVID-19 Response & Impact Fund – $75 million in grants and no-interest loans allocated to New York City not-for-profits to fund a variety of activities. Unrestricted, flexible funding to support new and emergency needs and meet community demands, particularly for service offerings outside normal operations required to respond to social distancing, isolation and quarantine. Also includes support to aid the loss of operational revenue from facility closures, canceled programs and events, etc.
- Oklahoma City – The OKC Small Business Continuity Fund designates $3 million in loans for businesses with fewer than 50 employees. The loan program offers 10-year, no-interest loans of up to $50,000, which could be forgiven in three years if the business meets certain long-term employee retention goals and other criteria. Ten-year, low-interest loans of between $50,000 and $100,000 are also available.
Another $1.5 million is earmarked for cash incentives, such as reimbursing businesses with fewer than 15 full-time equivalent (FTE) employees for up to $10,000 in retained employee payroll.
- St. Paul, Minnesota – The Saint Paul Bridge Fund includes a $2.25 million investment to provide $7,500 in grants for immediate business expenses, including, but not limited to, rent/mortgage payments, employee health benefits, leave payments and payroll, accounts payable and payments due to suppliers. Eligible businesses must have gross revenues of $2 million or less, been in operation for the last three months in Saint Paul and had their revenue impacted by COVID-19.
We continue to monitor and track these kinds of programs all over the country. For more information on this topic, or to learn how Baker Tilly public sector specialists can help, contact our team.