There may be some monetary relief ahead for small businesses in Elizabeth City hurting from the shock the coronavirus pandemic has cast on the region.
Elizabeth City City Council has approved $52,000 in seed money to fund what the city is calling the COVID-19 Small Business Micro Grant Program. The program will provide grants of up to $1,500 to small businesses adversely affected by the pandemic, according to City Manager Rich Olson.
“We recognize that our small businesses are experiencing a financial crisis as a result,” Olson said. “Lost income and unrecoverable expenses are causing immediate hardship for them.”
As a measure to prevent the spread of COVID-19, the respiratory disease caused by the coronavirus, many of the city’s small businesses have had to close or limit their hours of operation to comply with Gov. Roy Cooper’s series of executive orders to reduce social interaction. Cooper’s latest executive was a mandatory stay-at-home directive that went into effect at 5 p.m. Monday, March 30 and expires April 30.
The $52,000 in start-up money was pulled from the remaining funds in the city’s Business Improvement Grant fund, which is an economic development grant program for the city. The fund typically contains $80,000 a year and grants are made on the basis of how many jobs the proposed business improvement is projected to create.
The micro grants from the new fund will be awarded in amounts up to $1,500 to small, independent businesses located within the city limits, Olson said. Businesses must apply for the grants by April 22. Any applications received after that date will be considered if any funds are remaining.
Additional information on how small businesses can apply for the grants will be made available later this week, Olson said.
According to documents provided by the city, funds awarded through the Small Business Micro Grant program may be used for any business-related expenses including rent, mortgage payments, utility expenses, working capital or “other similar expenses that occur in the ordinary course of business.” Grants are not intended as unemployment assistance, the city said.
The grant funds will be turned over to Elizabeth City Downtown Inc., who will administer the program. ECDI will form a three-member subcommittee whose members will be selected based on city demographics to review applications and award funds. ECDI Executive Director Debbie Malenfant will serve as an ex officio member of the subcommittee.
The subcommittee and ECDI will also work with partner agencies to assist business owners in completing the required paperwork for their applications, plus guide them to other resources they may be eligible for, the city’s press release states.
Businesses can apply for the grant by completing a short application and providing the documentation requested. According to the city, eligible businesses should:
• Be a for-profit business with a valid business license and zoning permit and operate within the city limits.
• Operate under one of the following legal structures: sole proprietorship, LLC, LLP, LP, or corporation. Franchises, publicly traded companies or subsidiaries of publicly traded companies, and nonprofit entities do not qualify.
• Have been in operation and show revenues for at least the past six months.
• Have a brick-and-mortar location; home-based businesses do not qualify.
• Be a service or retail establishment open to the general public.
• Have at least one employee on payroll and no more than 50 employees. This excludes contract service workers and those employees paid on 1099 status. If a business is a sole proprietorship and the owner is the sole employee they may qualify if they can demonstrate that their rent, mortgage and business operating expenses are paid to third-party entities with no ownership or financial ties to the applicant.
• Have annual gross revenues of less than $2 million.
• Be a company or business in an industry outlined in Gov. Cooper’s executive orders 116 and 120, or any subsequent executive order, or that demonstrates it is otherwise was affected by the COVID-19 outbreak.
• Demonstrate a loss of revenue of 25 percent or more. To compute financial loss, the city will compare the business’s average revenue for the two months of operation prior to Cooper’s executive orders and/or the state’s declaration of a state of emergency to the month of operations immediately afterward.
• Must be current on taxes owed to the city and to Pasquotank County as of Feb. 1.
• Sign an affidavit indicating their intended use of the grant and their commitment to spend the funds within 30 days of receiving them.
In the case of multiple businesses located in one establishment with one address, such as a business co-operative, the business entity that holds the lease or mortgage for the space may apply for grant funds, the city said.
Eligible businesses will have to supply the following supporting documents to the subcommittee:
• A copy of a valid business license and city zoning permit.
• Articles of incorporation or any documentation showing the business’s legal structure.
• Financial documents showing revenue by month for two full months of operations prior to the governor’s executive orders and/or the declaration of the state of emergency. Also, financial documents showing revenue for at least one month of operations after the executive order and/or the declaration of the state of emergency.
According to the city, financial documents could include: point-of-sale reports, bank statements, quarterly sales tax filings, tax returns, CPA-certified profit and loss statements, or financial information reviewed and signed certified by a partner business organization. Examples of those organizations include the Elizabeth City-Pasquotank Economic Development Commission, the Small Business & Technology Development Center, College of The Albemarle’s Small Business Center, the Eastern Women’s Entrepreneurship Center, the Elizabeth City Area Chamber of Commerce, River City Community Development Corp. and/or SmartUp.
• Other documents as requested by committee.
All financial documents and proprietary business information submitted will remain confidential, the city said.
The grants will disbursed as soon as possible, the city said. Priority will given to those businesses who completed and submitted their applications by the April 22 deadline, until all $52,000 from the fund has been expended.
The grant program was the idea of Olson, Malenfant and Elizabeth City-Pasquotank County Economic Development Director Christian Lockamy.
“Small businesses support thousands of local jobs, collect sales tax revenues, pay property taxes, and otherwise contribute to our economy and economic base,” Lockamy said in the press release. “Contributing the BIG funds to this program makes good sense.”
According to the press release, city funds aren’t the only monies envisioned for the Small Business Micro Grant fund. Any organization, entity or business may also contribute to the fund so that more small business affected by the pandemic can benefit.
Olson said Tuesday the city has had conversations with several private groups about also contributing to the fund. For more information about the fund, contact Olson at 252-337-6864.