Vermont businesses that have been ineligible to receive state or federal Covid-19 relief money can now tap into a $30 million fund, Gov. Phil Scott announced Thursday, along with officials at the Agency of Commerce and Community Development and the Department of Economic Development.
The Economic Recovery Bridge Program, funded through H.315 and H.439 passed this year by the Legislature, is aimed at businesses in the state’s hard-hit tourism and hospitality sectors.
That could include businesses formed within the past year that were unable to document a loss of revenue for previous loans and grants, or venue operators whose business dried up during the pandemic. Applications open Monday.
“As we move out of the pandemic emergency and into our long-term recovery, it’s so important that we support Vermont’s small businesses and employers, who are the backbone of our economy,” Scott said in a statement. “These grants will provide critical relief in the short term, allowing them to rebuild a stable foundation for their economic futures.”
Priority will be given to applicants who have not received previous benefits for 30 days. Then, businesses with outstanding unmet needs can apply as remaining money allows.
Business advocates welcome the attention to businesses with outstanding unmet needs but question whether there’s enough money.
Questions remain about how large the need is. The state doesn’t have a “real objective measurement” to figure out the unmet need, said state Rep. Charlie Kimbell, D-Woodstock, vice chair of the House Committee on Commerce and Economic Development.
“We’re going to see over the next couple of months as to what that looks like, so that’s going to be really important,” Kimbell said.
The Vermont Chamber of Commerce was discouraged by the $30 million total, said Charles Martin, director of government affairs for the business organization. Although every bit helps, “it’s not going to address the overwhelming unmet need that lingers from 2020 and the winter of 2021,” Martin said.
The program also falls short of the $50 million Scott suggested for economic recovery grants in his American Rescue Plan proposal in April.
“I don’t feel that, beyond that 30-day window, [funding is] going to last much longer, in terms of the applicants who will then qualify after that initial phase,” Martin said.
Even if the money does dry up quickly, the state will be able to glean useful data from the application process, said Joan Goldstein, commissioner of the Department of Economic Development.
“I think there were enough safeguards built into the methodology that we’re going to use this money very, very prudently,” Goldstein said.
Vermont businesses have about $500 million in unmet needs dating back to last year, according to the most recent numbers. Goldstein said it isn’t clear how much of that has been addressed by the latest round of paycheck protection loans and grants, which drew about $500 million in applications.
And payroll, while significant, is only one portion of day-to-day business costs. The program announced Thursday is directed at fixed expenses, such as rent or utilities.
Goldstein said the program’s award formula, based on net tax loss rather than loss of gross revenue, looks at three months of a business’s fixed expenses, based on supplied invoices.
“Because things were closed, and some [businesses] still have capacity constraints, until we get to the 80% vaccination rate, you know, I think it’s a good start,” Goldstein said.
The Agency of Commerce and Community Development is scheduled to host a webinar Friday at noon to describe the program in greater detail and answer questions. Interested business owners can find the link to join on the agency’s website, and a recording will be posted afterward.
