Business & Economy

State expands emergency grants programs to include more small businesses

Lindsay Kurrle
Lindsay Kurrle, Vermont’s secretary of the Agency of Commerce and Community Development, speaks at Gov. Phil Scott’s weekly press conference on Feb. 27, 2020. Photo by Mike Dougherty/VTDigger

Officials expected the state’s $150 million emergency business grants program, launched July 6, to run out of money quickly. But four weeks later, nearly a third of the money is still available, and now the guidelines are being expanded to allow more Vermonters to apply.

Under the original eligibility criteria, a business was required to have at least one employee, defined as someone who receives a W-2 and isn’t an owner. That eliminated many applicants.

Under the new guidelines, a business with just one employee – an owner who receives a W-2, can also apply.

Christopher Laroque, who owns a concert and event production company in Swanton, revised and submitted his application on Aug. 3, the day eligibility was expanded. He received an email the same day saying his application was approved, and a check – Laroque didn’t say for how much – would be on its way in two weeks.

The grant program was set up by the Legislature to transfer about $150 million to companies that have lost money as a result of the Covid-19 pandemic. Businesses are eligible for grants if they have lost at least 50% of their regular income in a single month of the first half of 2020. Grants are based on 10% of 2019 annual revenues, and are limited to no more than $50,000. 

Sole proprietors – companies that aren’t incorporated and don’t have employees – weren’t eligible for the grant program. The exception: women- and minority-owned businesses without any employees are eligible for grants. The state has an estimated 40,000 sole proprietors, said Rep. Mike Marcotte, R-Coventry, chair of the House Commerce Committee.

The grants are part of a $600 million Covid-19 relief package that Gov. Phil Scott signed into law this summer using money from the $2 trillion federal emergency stimulus measure passed by Congress in March. The grants are being administered by the Tax Department and the Agency for Commerce and Community Development.

Vermont’s $1.25 billion share of that federal measure includes $300 million for the health care industry, $35 million for farms, $20 million for broadband expansion, and about $150 million in grants for businesses. 

Many business owners, including Laroque, have complained it’s not fair that sole proprietors who are white and male cannot use the grants program. In response, the state’s Community Development Block Grants program started accepting applications July 20 for awards of $5,000, $7,500 or $10,000 open to sole proprietors of all genders and races. The money is available to be used as working capital to cover business costs such as rent, utilities and changes needed to reopen under Covid-19 safety guidelines.

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But the CDBG program only has $1.5 million. The money will be allotted by lottery on Aug. 14. Marcotte said lawmakers want to create more ways to get money to sole proprietors when the session begins again Aug. 25.

“We’re looking to see what the data looks like when we come back in three weeks on how the lottery went,” said Marcotte on Monday. “Then I think we’ll be working with ACCD to figure out the best way of getting more dollars into that program for sole proprietors.”

That is also a goal of ACCD Secretary Lindsay Kurrle.

“We know that some business types weren’t able to apply out of the gate and we hope this will help more of those businesses access these critical funds,” she said in a prepared statement. “Even with this expansion of the program we know sole proprietors without a W-2 employee will still be in need of assistance and we will work with the Legislature to develop solutions upon their return.”

Both Marcotte and Tax Commissioner Craig Bolio said they were surprised there was still money available in the emergency business grants program. In launching the program, state officials urged applicants to get their paperwork ready in advance and warned the money would go out on a first-come, first-served basis. 

It’s possible some business owners don’t know the grants are available. 

“One of the things we’re trying to do is make sure there’s as much awareness of the program as possible,” Bolio said. “We think the application is relatively straightforward.”

Larocque said the application took him about 15 minutes. He said while he understands that state officials need to limit eligibility, he’s not ready to drop his complaints about the extra $5 million for female- and minority-owned sole proprietorships.

“I just don’t understand how it’s fair to open it only to a select group,” he said. “To be honest, pretty much everybody I have talked to, men and women, have agreed this isn’t right.”

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Anne Wallace Allen

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