Small-business relief program starts Monday, be ready to act fast - Wooster Daily Record

Small-business relief program starts Monday, be ready to act fast - Wooster Daily Record


Small-business relief program starts Monday, be ready to act fast - Wooster Daily Record

Posted: 01 Nov 2020 03:07 AM PST

Mark Williams  |  The Columbus Dispatch

The window to a new round of stimulus programs for Ohio small businesses, bars, restaurants and low-income renters and homeowners opens Monday.

But small businesses interested in one program that provides $10,000 grants shouldn't dawdle: That window figures to close fast.

Last week, the state announced $419.5 million in federal relief programs meant to help low-income families, small businesses, hospitals, colleges, nonprofit groups, arts groups and others.

The Ohio Development Services Agency, which will run the programs, has posted instructions for the new programs at BusinessHelp.Ohio.Gov. The application process for the programs is meant to be simple and quick.

"When we look at all these different programs, it's a substantial economic package to help those really hurting from the pandemic,'' said Lydia Mihalik, director of the Ohio Development Services Agency, which is administering the programs.

The relief is one of several steps the state has taken to help businesses battered by the pandemic.

Just this week, the state announced a $5 billion payment to Ohio employers from the state's fund for injured workers.

"We recognize things are uncertain at this point in the pandemic," Mihalik said. "The injury to these businesses and other institutions is going to be long term."

One new program, the Small Business Relief Grant, is a $125 million fund that provides a $10,000 grant to eligible businesses with no more than 25 employees.

The grants are being spread over Ohio's 88 counties. Fifty businesses in each county will get funding. After that, the rest of the money will be awarded to businesses throughout Ohio.

The money is awarded on first-come, first-served basis, and that's why businesses will need to act fast. The grants can be used to cover costs such as payments for rent, mortgage, salaries and expenses related to the pandemic.

The state will begin taking applications at 10 a.m. Monday. The state is encouraging small businesses to start the process now by establishing an Ohio ID that will be needed for the application.

Separately, the state has designated $38.7 million for the Bar and Restaurant Assistance Fund geared toward liquor permit holders.

Businesses with a permit that allows on-premises alcohol consumption are eligible to receive $2,500 per business location. About 15,400 locations are eligible.

Unlike the small-business grants, the money will be available to bars and restaurants until Dec. 30.

"All businesses in the state have been adversely affected," said Sherry Maxfield, director of the Ohio Department of Commerce. "The hospitality industry has been hit the hardest."

The money can be used by bars and restaurants to pay rent, buy supplies or take care of other expenses with minimal strings attached, she said.

The Development Services Agency also will allocate $50 million to 47 Community Action Agencies to help low-income families pay rent, mortgages or utility bills. Ohio families can apply for the assistance through their local Community Action agency beginning Monday.

Ohio households behind on their bills with an annual income at or below 200% of the federal poverty guidelines will be eligible for assistance. Families of four are eligible if they make no more than $52,400 a year.

mawilliams@dispatch.com

@BizMarkWilliams

Kendall County small businesses can apply for Illinois BIG pandemic relief grants - Kendall County Now

Posted: 30 Oct 2020 10:03 AM PDT

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Small businesses around the world have been affected by the COVID-19 pandemic, but in Illinois and Kendall County, they can receive some BIG relief with the Business Interruption Grant (BIG) program.

The BIG program is a $636 million program developed by Gov. JB Pritzker and the Illinois General Assembly to provide economic relief for small businesses hit hardest by COVID-19. The grant funding helps small businesses with capital expenses, including payroll costs, rent, utilities and other operational costs. And as COVID-19 case numbers surge across the state, state officials spent the month of October heralding the BIG program as a bone to throw struggling small business unable to offer indoor dining.

Priority will be given to applicants that did not receive Paycheck Protection Program loans or other forms of emergency aid from the CARES Act or other governments, are located in DIAs, are subject to regional mitigation measures due to COVID-19 resurgence and have less than $5 million in annual revenue.

Jock Sommese, consultant for the Small Business Development Center at Waubonsee Community College and in partnership with Kishwaukee College, said a difficulty with the BIG program is that "a lot of businesses are not eligible for it."

"Businesses that received PPP money do not have priority," Sommese said. "Not having priority is a nicer way to say they're not eligible. Clients of mine have not applied for BIG because they received PPP money."

How to apply, who's eligible, and who's not

According to the Illinois Department of Commerce and Economic Opportunity website, BIG is the largest program of its kind in the nation – leveraging federal CARES Act funds to establish economic recovery programs: more than $270 million for small businesses, and an additional $270 million exclusively for childcare providers, administered jointly by DCEO and IDHS.

Erin Guthrie, the director of the Illinois DCEO, said last week more than 4,000 small businesses have received grants through the BIG program, with half of the recipients minority-owned and one-third women-owned.

$174 million of BIG money remains available, and applications will be accepted until funds are exhausted.

In the first round of funding, BIG directed $49 million to about 2,800 businesses in 400 cities in 78 counties. First round grants ranged from $10,000 to $20,000 and averaged $17,000. More than 5,000 businesses applied for funding, with grantees selected via random lottery. 

The second round has a focus on businesses downstate and those in disproportionately impacted areas. DIAS are defined by ZIP code for communities most economically distressed and vulnerable to COVID-19.

So far, in the second phase of the program that began in Sept. 1, 200 businesses received grant funds in 340 cities in 79 counties. Second round grant size will be calculated based on revenue losses and/or expenses over the last two months, ranging from $5,000 to $150,000.

The second round of grants sets aside $60 million for heavily impacted industries, such as movie theaters, performing arts venues, concert venues, indoor recreation and amusement parks, $70 million for DIAs, $5 million for livestock production disruptions, more than $100 million for downstate communities and loan forgiveness for Illinois Small Business Emergency Loan recipients.

To be eligible for the second round of BIG, businesses must meet the following criteria:

• Must be an independently owned and operated for-profit corporation or limited liability corporation, partnership, or sole proprietorship authorized to conduct business in the state of Illinois; OR a 501c3, 501c6, or 501c19 nonprofit

• Must have been operating for at least three months prior to March 2020

• Must have had less than $20 million in gross operating revenue in calendar year 2019, or a pro-rated amount if in operation for less than a year prior to March 2020

• Must have experienced operating losses since March 21, 2020

• Must have been closed or had reduced operations due to government orders, public health guidelines, or depressed consumer demand during the COVID-19 pandemic

• Must have complied with all relevant laws, regulations, and executive orders from the state and federal government, including the social distancing guidelines as promulgated by the Executive Orders of the Illinois Governor

For information about the Business Interruption Grants program, visit the Illinois Department of Commerce and Economic Opportunity's webpage.

Accepting a Helping Hand: How to Fund Your Business with Government Grants - Entrepreneur

Posted: 02 Nov 2020 06:00 AM PST

7 min read

Opinions expressed by Entrepreneur contributors are their own.

Funding isn't a one-size-fits-all process. Traditional routes for raising money — venture capitalists, angel investors or crowdfunding — aren't the only options, and for many entrepreneurs, they may be the wrong options. Often, founders forget that there is potential funding support right under their nose; funding that you don't have to pay back or sacrifice equity for.

Government grants offer more than money — they come with access to a wide network of resources like incubators, research organizations, and useful public information. For a startup in any industry, that access is invaluable for innovation and growth. Some founders have noted how R&D collaborations that were the result of a government grant, actually led to more disruptive inventions than those made by privately-funded businesses.

From knowing where to look, to knowing what to expect, here's how to tap into government grants to fund your business:

Start your search locally. 

Across the U.S., the Economic Development Administration (EDA) has agencies that operate on a state, ZIP code, and town level. Sometimes referred to as "opportunity zones," each pocket offers government grants and tax abatements for different kinds of new businesses. You can use this tool to search for EDA opportunities. 

The size and criteria of the grants vary, but the general requirement is that you operate in a specific area. The EDA also places emphasis on underrepresented founders and businesses with a human focus. For example, it has announced a $25 million funding pool for regional companies addressing the economic, health, and safety risks caused by the Covid-19 pandemic.

If there aren't any financial offerings in your current location, Gabe Zichermann, chief executive of Failosophy, suggests moving your startup to the closest place that does provide grants, or at least creating a business address there to take advantage of the zone. Zichermann also notes that if the EDA can't support you with a grant, they might be able to help with tax exemptions that could amount to the equivalent of a grant in the long run.

In addition, the Small Business Administration (SBA) has offices throughout the U.S. and works with on-the-ground organizations to pair founders with grants. Nonprofits and educational startups are typically the most successful in attaining federal grants with SBA connections, but there are also grants aimed at veteran and disabled entrepreneurs. You can apply through the Grants website or visit your local SBA office to meet with a financial advisor and discuss the best options. For more information, check out this resource from startup support organization pre-seed accelerator Founder Institute

Sign-up for government-backed competitions.

Entrepreneurs tend to assume that anything related to the government means lots of paperwork and waiting in line for hours. While this can be the case, government financing can also be found at startup competitions. Whatever your niche, it's likely that there's an event where you can win large sums for your product or service.

Challenge.gov has a comprehensive list of competitions taking place around the country, all with federal prizes that reach millions of dollars. Since 2010, the U.S. government has run close to 1,000 challenges in search of new ideas and concepts. Applicants range from students, small business owners, and academic researchers, and past winners include companies exploring self-driving cars, clean water solutions, and healthcare robots.

Accept that the paperwork is a necessary evil.

In comparison to other types of funding, government grants come with more bureaucracy — which means more paperwork. This is a big turnoff for founders, but if you spend half a day with a legal advisor walking you through the processes, the payoffs can be big. The time is also worthwhile because you need to be sure that your business is fully aligned to the funding program's priorities, otherwise, your proposal will be ignored. 

The material required for grant applications starts with a few standard items to get the ball rolling:

  • A presentation deck outlining your company

  • Financial statements detailing your 3-5 year projections

  • A personal video highlighting your idea, hook, and planned impact

  • A demo of your product or service

  • Proof of tax compliance and appropriate registration numbers

  • Reference numbers/logins for relevant platforms 

Zichermann recommends bearing in mind that bureaucrats won't necessarily be able to tell if your business has legs in the same way that a seasoned investor would. It's important then, to emphasize in plain English exactly how your business will be able to make use of the grant. Especially if you are filling a community or environmental gap, play on this, as it will be your ticket to securing the money.

Be prepared for what's expected of you.

Sean Callagy, co-founder of UNBLINDED, points out that government grants are becoming increasingly competitive. "In a time of crisis, there is the desire to keep the economy flowing and keep things moving," he says, and so more startups are searching for financial backing while governments hope to kickstart economic activity. 

Although sometimes referred to as "free money," government grants do have some conditions, and perhaps even stricter ones during the pandemic. Government grants tend to have a specific purpose aligned to the strategic national, state or regional priorities so you'll be held accountable for what you do with it.

Awarding bodies will often want to add your startup to the list of companies they fund to showcase the work they're doing, and ask to periodically visit your offices to document progress. If you're a minority entrepreneur, they may also want to profile your story on their website and press channels. But the level of pressure won't be anywhere near what VCs apply to their investment portfolio. 

Always think about how you package yourself and your company when dealing with governments. Though you may be communicating with someone from a local office, you could find yourself catching the interest of a senator and being invited to a national event. It's about being ready for anything, and seizing the opportunity to present on a bigger platform.

Don't put all your eggs in one basket.

Government grants don't always offer the full amount startups need to extend their runway or develop new products. Likewise, government grants tend to have a social focus, prioritizing companies that champion positive impact for people and the planet. It's therefore wise to not rely solely on government grants to fund your business.

Callagy highlights that while there are challenges in accessing money as a startup, both the government and you as a founder, share a desire for solutions. You can therefore harness the government routes that match your purpose and build long-term ties, financial or otherwise.

Public Law 95-507 changed the way government contracts are planned and implemented by focusing on including small businesses that are economically and socially disadvantaged. That means governments are actively looking for more diversity in their supplier base, so if you're from an underserved community, agencies will give you preference.

Government grants are a significantly more flexible and accommodating funding option for startups. Governments are usually willing to take risks on early-stage businesses that investors or banks are more skeptical about, plus there is no limit to the number of grants you can apply for. The biggest advantage, though, is having the clout and stage of a national entity driving your project forward.

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