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New relief options available for small biz/restaurants and bars
SHERRY KARABIN
Legal News Reporter
Published: December 3, 2020
Two Ohio small business relief programs are now available to owners whose establishments have been negatively impacted by the COVID-19 pandemic.
The Small Business Relief Grant and the Bar and Restaurant Assistance Fund are part of a more than $429 million pandemic aid package announced by Ohio Gov. Mike DeWine on Oct. 23. The package, which utilizes CARES (Coronavirus Aid, Relief, and Economic Security) Act funding also provides money to low-income renters, arts and nonprofit organizations, colleges and universities.
Harrington, Hoppe & Mitchell member Shawna L’Italien said $125 million has been set aside for the Small Business Relief Grant program, which offers $10,000 grants to eligible companies to help cover revenue losses or unplanned costs related to COVID-19 such as the purchase of personal protective equipment (PPE) for customers and employees.
“The program is funded by CARES Act dollars and the grants do not have to be repaid,” said L’Italien, who focuses on business, real estate and elder law and estate planning and probate matters.
“In addition to covering the costs of PPE and other measures taken to protect customers and employees, the funds can be used to pay mortgage or rent expenses for the business, utility payments, salaries, health insurance contributions for employees and supplies,” L’Italien said.
“There are not too many choices out there right now for struggling small businesses,” said L’Italien. “The Paycheck Protection Program (PPP), which provided incentives to small businesses to keep their workers on the payroll closed in August. As such, the SBA is no longer accepting PPP applications. Many businesses are still in the process of trying to get their PPP loans forgiven.”
To qualify for a Small Business Relief Grant, the company must be a for-profit entity with at least one and no more than 25 total or full-time equivalent Ohio W2 employees as of Jan. 1, 2020; have a physical location in the state and earn at least 90% of its annual revenue from activities based in Ohio.
The business must also have been in continuous operation since Jan. 1, 2020, with the exception of COVID-related interruptions and have the ability to continue to stay up and running.
“Owners applying for these grants who also received a PPP loan or other government assistance must have fully utilized any other governmental support received,” said L’Italien.
As Brouse McDowell attorney Shelby Ranier explains certain businesses are ineligible for the grants.
“Publicly traded businesses, clubs, lobbying firms and other businesses involved in political advocacy, hospitals, private schools and entities engaged in the sale or distribution of liquor, tobacco, cannabis or vaping products are among those that do not qualify,” said Ranier.
L’Italien said the goal is to fund at least 50 companies in each of the state’s 88 counties.
The Ohio Development Services Agency began accepting online applications (https://www.businesshelp.ohio.gov/) on Nov. 2.
“The applications will be approved on a first-come, first-served basis, so it’s not a good idea to wait,” said L’Italien. “Applicants must have an OH|ID, which provides a secure way for Ohioans to interact with multiple state agencies with a single user account. If applicants access the Ohio Business Gateway they will already have such an ID number. If not, one can be created for free.”
Entities that do not qualify for the Small Business Relief Grant program may be able to get help through the Bar and Restaurant Assistance Fund.
A total of $38.7 million is being used to provide $2,500 payments to restaurants and bars that have an on-premise liquor permit, which was limited in use to due COVID-19 restrictions.
“The fund is expected to help more than 15,400 licensees that were significantly impacted throughout Ohio,” said Ranier.
Like the small business relief grants, monies for the restaurant and bar fund come from the CARES Act.
The application process went live on Nov. 2 (https://www.businesshelp.ohio.gov/) and closes on Dec. 30, 2020, but applicants are being encouraged to apply by Dec. 18.
To be eligible, a permit holder must have had an active on-premise permit as of close-of-business on Oct. 23, 2020.
While the permit holders do not have to be currently open, they must have an active liquor license.
Other qualifying businesses include breweries, distilleries, wineries, casinos and private clubs.
“The good thing about this program is that a liquor permit holder can apply for a $2,500 payment for each unique location, which helps chains,” said Ranier. “Owners are required to use the funds for COVID-related expenses due to business interruptions.
“We’ve had a lot of our clients reach out to us and ask how to apply for both of these programs,” said Ranier. “We are also trying to get the word out to clients and other small businesses who have not heard about these options.”
“Right now securing a standard loan from a bank can be difficult if income has drastically reduced for the business during the pandemic, so I am advising small businesses that have been hurt by the pandemic to take a close look at these new programs,” said L’Italien.
Depending upon the circumstances of the particular business, a company may qualify for multiple programs, said L’Italien.
“I am also advising my clients to review their overhead and costs to see if there are ways to cut back or to recreate their business models to better carry them into the future. Planning, diversification and creativity may help a business come out even better on the other side of this pandemic,” said L’Italien.
“Hopefully we will continue to see ongoing assistance programs for struggling businesses, but given the environment some businesses may have to make some tough decisions to stay alive.”