CLIENT ALERT
By: Jason Gregoire
October 26, 2020
On October 22, 2020, Massachusetts Governor Charlie Baker announced the intent to issue $50.8 million in grants to small businesses who have suffered financial losses due to the COVID-19 pandemic with preference given to small businesses (1) whose owners are women, minorities, veterans, or members of underrepresented groups; (2) who serve “Gateway Cities”; (3) who have been most negatively impacted by the pandemic; and/or (4) who did not receive support from the Paycheck Protection Program (PPP) or other state or federal relief programs. This article describes grant eligibility and application requirements.
Grant Eligibility Requirements
The Massachusetts Growth Capital Corporation (MGCC) will be administering these grants. There are several eligibility requirements for all grants issued under this program:
- Business must have a physical establishment in Massachusetts
- Business must be a for-profit entity
- Business must be able to prove loss of income greater than or equal to the amount of the requested grant
- Business must be currently in operation or intend to reopen
- Business must be in good standing with the state and city/town in terms of taxes and licenses/registrations
The following business types are not eligible to apply: real estate rental/sale; those owned by someone under age 18; chain stores; liquor stores, weapons/firearm dealers; lobbying firms; or cannabis-related businesses.
Businesses With 5 or Fewer Employees
Businesses in this category are eligible to receive grants up to $25,000. Of the 5 employees, 1 or more must own the business. The business must provide goods or services to multiple clients or customers and the owners of the business must earn an annual income equal to or less than 80% of the Area Median Income based on family size, which differs depending on the municipality in which the business operates.
Applicants must supply the MGCC with documentation to support the grant request including, but not limited to, DUNS number, 2019 business owner tax returns, business lease, mortgage bill, and invoices for applicable expenses. If an applicant receives a grant, funds may be used to cover rent, staffing, utilities, or other general business purposes as well as purchase of Personal Protection Equipment (PPE). There are many non-approved uses of funds such as purchase of equipment or property, business expansion, and construction or lobbying activities.
Businesses With 50 or Fewer Employees
Businesses in this category must have 50 or fewer full-time equivalent (FTE) employees, 1 or more of whom must own the business. Applicants need only submit copies of federal personal tax returns for each business owner with 20% or greater ownership. If an applicant receives a grant, permissible uses include employee payroll and benefit costs, mortgage interest, rent, and interest on debt obligations. Grantees may not use funds to purchase real property, expand the business, or fund construction or lobbying activities.
How to Apply
The application period opened on October 22, 2020 and closes on November, 12, 2020 at 12 p.m. Businesses are advised to apply as soon as possible, although the program is not first come-first serve. Applications will be evaluated based on the negative impact that the pandemic has had on the applicant’s business. Grant funding should be issued by the end of 2020.
The online grant applications can be accessed here: https://www.empoweringsmallbusiness.org/covid-19-response/covid-19-grants-massachusetts-small-business. Please consult with an attorney if you have questions concerning eligibility, the application process, or permissible use of funds.