State officials are creating rules for Vermont’s latest business grant program, hoping to send $76.7 million in federal money where it is needed the most.
The application process for the business grants program, which was approved by lawmakers Sept. 25 as part of the state budget, is being refined to increase the eligibility pool, said Joan Goldstein, the state’s economic development commissioner.
The original $150 million emergency business grants program was launched July 6. That program, set up by the Legislature to help companies that lost money because of the Covid-19 pandemic, ultimately made grants of up to $150,000 available to individual businesses.
The new program will make up to $300,000 available in all — meaning businesses that got the full $150,000 in the first round can get up to $150,000 more. Companies that got less than $150,000 can apply for the difference between their grant and the $300,000 total.
In the first round of grants, businesses were eligible if they had lost at least 50% of their regular income in a single month of the first half of 2020. That 50% requirement eliminated too many Vermont businesses, and will be scaled back, Goldstein said.
It’s not yet clear when the Agency for Commerce and Community Development will start accepting applications for the new program.
“It’s going to be a couple of weeks,” Goldstein said Thursday, saying that the application is being changed to reach more businesses with unmet needs. “We have to have the applicants enter in information that they didn’t have to do before on the first round of grants.”
Most of the state’s business aid during the Covid-19 pandemic comes from the $1.25 billion that Vermont received as its share of the $2 trillion CARES Act, passed by Congress in March. Lawmakers only this month finished allocating all the money to an array of sectors, including the Agency of Human Services, housing, health care, and the arts. Vermont’s per capita share of the CARES Act is among the highest in the nation, a fact that Goldstein credited to U.S. Sen. Patrick Leahy, D-Vt., who worked to ensure a minimum allocation was set for small states.
The share of Vermont’s $1.25 billion that lawmakers have allocated to business grants is $230 million, about 18% of the total.
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Goldstein said Vermont businesses are using the money to pay rent and mortgages, and in some cases to pay staff. Added to the $1 billion that Vermont businesses have received from the federal Paycheck Protection Program, she said, “there is liquidity in the market, which is a good thing.”
After seven months of pandemic and economic struggles, Vermont Chamber of Commerce President Betsy Bishop said she hadn’t heard of any businesses that have closed.
“What I am hearing now is about businesses that are contemplating closing, or closing temporarily,” said Bishop, saying she’d talked to restaurant operators who planned to close for the winter. She noted that she wouldn’t necessarily have heard about small businesses that have scaled back dramatically or just didn’t reopen after closing last winter.
Goldstein said she expected some businesses wouldn’t make it through, despite the state and federal grant programs. But for many, she said, the grants can pay for things like rent and utilities until the economy picks up again.
“Are you going to save every business? Probably not,” Goldstein said. “But you can save so many, and avoid massive bankruptcy and foreclosure, just by keeping things current.”
Recovery may be slow
The restaurant and hospitality industry has been hit hardest in the pandemic, because restrictions on occupancy have lasted the longest. Although the state recently lifted the capacity restrictions on hotels, some customers continue to stay away because of quarantine requirements.
Hotel Vermont in Burlington received $150,000 from the earlier grant program and will apply for another $150,000, said general manager Hans Van Wees.
He estimated Hotel Vermont will show a 65% drop in revenues in 2020. The $150,000, plus the hotel’s federal Paycheck Protection Program grant, and the additional $150,000 that the hotel hopes to receive, will make up 15% or 20% of the lost revenues.
“In the case of a large hotel like ours, it will not meet all the needs, but we certainly appreciate the work the Legislature and the governor have done on this,” Van Wees said. He said the hotel will be at nearly 100% capacity for the upcoming long weekend, although some customers have canceled recently because rising infection rates where they live would require them to quarantine in Vermont.
Van Wees said the hoteliers he has worked with generally hope the pandemic and the economic problems will ease enough for hotels to break even in 2021 and make a small profit in 2022.
“By 2023, we might be back at business levels of previous years; I’m not sure yet,” Van Wees said.
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