The state's new $50 million small business business grant program was designed as a bridge to help smaller employers navigate COVID-19 disruptions, officials said Oct. 30.
“This is meant to be a bridge, focused on our smallest of small businesses,” Department of Economic and Community Development deputy commissioner Glendowlyn Thames said during an online video meeting with 300 small business leaders.
The state plans to give $5,000 grants to 10,000 of Connecticut’s smallest businesses hurt by the coronavirus pandemic by the end of the year.
The $50 million small business grant program comes from the state’s $1.4 billion pool of federal coronavirus relief funds.
“This is not the be-all, end-all,” Thames said.
“I know we will get another round of (federal) stimulus very shortly—our governor and our federal delegation are working hard everyday to make sure we get another round for our small businesses.”
Thames, Sheila Hummel, the director of the state's Small Business Development Office, and DECD senior adviser Maribel La Luz explained the program and answered questions from small businesses owners in the 45-minute call.
La Luz said DECD plans another video conference Nov. 6, before online applications for the one-time grant go live Nov. 9.
Hummel said DECD will also hold video office hours three times a day during the week of Nov. 9 to answer small business owners’ questions.
To qualify for a grant, a business must have 20 or fewer employees or a 2019 payroll of less than $1.5 million.
“You can be a business with 30 or 40 employees but a payroll less than $1.5 million and qualify,” Thames said.
Here is more information on eligibility requirements, exclusions, how the money can be used, and the program’s funding priorities.
Hummel said the application process will be easy and will not require applicants to upload documents.
Applicants will be trusted to submit accurate information, although the electronic application process uses state tax records to verify the authenticity of payroll and revenue numbers.
Applications will be processed on a first-come, first-serve basis.
The funds must be disbursed by the end of the year, Thames said.
“We are under a tight deadline,” she said.
State officials announced the $50 million program Oct. 20, just a few days after CBIA and other other organizations called for $70 million of Connecticut’s federal coronavirus relief funds to be used to help small businesses.
“We know that for the smallest of small businesses, this is a lifeline that can help pay two months of rent,” Thames said.
She acknowledged the $50 million won’t be enough to help everyone.
“We estimate there are 50,000 of those businesses statewide that employ approximately 350,000 people,” she said.
Many of the small businesses that will qualify for this grant were unlikely to receive PPP or EIDL loans, Thames said.
An earlier state bridge loan program helped more than 2,100 small businesses.
Some other facts about the grant program:
- Funds can be used to pay an independent contractor
- The IRS considers this grant part of the recipient’s 2020 taxable income
- A nonprofit with an endowment but a substantial operating loss caused by the pandemic is eligible
- An owner of two or more small businesses can apply for each business providing each has a separate tax identification number
- If a nonprofit has not qualified for a 501(c)(3) tax exemption with the IRS, it is not eligible for this program
- If a business received PPP, an EIDL, or other types of grant dollars, it cannot use this $5,000 grant to pay the same expenses those other loans and grants covered
“If you used a PPP or EIDL loan for rent for June and July, you can’t then claim to use this grant for those same rent periods,” Thames said. “But you can use it for October and November rents.”
La Luz urged small businesses owners to share news of the grant program.
“We really want as many businesses as possible to take advantage of this,” she said.