Legislative Alert: Economic Recovery Grant Program Update
On Thursday, August 20, 2020, Governor Janet Mills announced the launch of the newly established Maine Economic Recovery Grant Program – a state-based approach to help support struggling Maine businesses and nonprofit organizations that have experienced business disruptions and have been impacted by the economic downturn caused by COVID-19. The Department of Economic and Community Development program is the result of recommendations from the Governor’s Economic Recovery Committee’s July 15, 2020 report.
The $200 million program, funded by Federal CARES Act monies, is not intended to replace lost profits but to keep impacted businesses viable. The short-term relief may be used to cover expenses, including but not limited to: payroll costs and expenses; rent or mortgage payments for business facilities; utilities payments; necessary operating expenses; expenses incurred to replenish inventory or other necessary re-opening expenses; or purchase of personal protective equipment required by the business or business related equipment. Funds must be spent on operations that are strictly within Maine.
Certain criteria must be met in order qualify for grant funding. A business or nonprofit must demonstrate a need for financial relief based on lost revenues minus expenses incurred since March 1, 2020 due to COVID-19 impacts or related public health response. The business or organization must also:
- have significant operations in Maine (headquartered in the state or has a minimum of half its employees in Maine)
- employ less than a combined total of 50 employees (fulltime equivalent) and contract employees at any point during the year
- have been in operation for at least one year before August 1, 2020, and not currently be in bankruptcy and not permanently have ceased operations
- be current and in good standing with all Maine State payroll taxes, sales taxes, and state income taxes through July 31, 2020 and be in good standing with the Maine Department of Labor
- be in consistent compliance and not subject to any enforcement action with COVID-19 Prevention Checklist requirements.
The application period runs from August 21, 2020 through September 9, 2020 with notification to eligible organizations by the end of September and grants made in early October. The amount awarded will be based on demonstrated need as a pro-rated percentage of the total cost of business interruption reported by qualified applicants. Awards will be capped at $100,000. A minimum grant amount will be awarded, although that amount has not been established to date. Funding will not be given on a first come, first served basis. Should future federal financial support come to Maine, additional funding may be dedicated to the grant program.
Certain for-profit and non-profit organizations do not qualify for grant funding. Professional services; 501(c)(4) and 501(c)(6) organizations that lobby; public, private and charter K-12 schools; higher education institutions; municipalities; assisted living and retirement communities; nursing homes; childcare organizations; hospitals; and private clubs are examples of ineligible organizations.
The following information will be needed in order to successfully complete the application: federal employer identification number or social security number; type of business/organization (for-profit or non-profit); Data Universal Number System (DUNS) number; principal office address; “Doing business as” (DBA) name; applicant address and other contact information; and ownership percentage of each individual owner with greater than 25 percent equity (businesses only). Sole proprietors will need the total amount of unemployment compensation benefits received from March 1, 2020 to June 30, 2020. Financial and tax information from 2017, 2018, and 2019 as well as any other funding awarded through federal grants will need to be furnished. Finally, an estimate and justification of the percent of 2020 loss in income directly connected to a disruption of operations due to COVID-19 must also be provided. Applications must be submitted through the DECD online portal.
The Department of Economic and Community Development hosted a webinar on August 21st providing greater details on the program and how to apply for funding. More than 600 people participated in the event, which was led by Commissioner Heather Johnson and Business Development Manager Jonathan Poole. A second webinar will be held on Tuesday, August 25th at 11 am. To register for the event, please click on the following link: Economic Recovery Grant Program Webinar.
Please do not hesitate to reach out to us for more information or assistance in applying for this grant program.