Governor DeWine recently announced Ohio’s Small Business Relief Fund program for Ohio’s small businesses that have been harmed by the COVID-19 pandemic. The program includes up to $125 million of funding provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Qualified businesses can receive a grant of up to $10,000. Applications for the program opened on November 2, 2020 and are generally approved on a first-come, first-served basis.
Who qualifies for a Small Business Relief Grant?
For-profit businesses with between 1-25 Ohio employees (or full-time equivalent employees) qualify if they have the following:
- A physical location in Ohio;
- At least 90 percent of their annual revenue from Ohio-based activities;
- Have been in continuous operation since January 1, 2020, except for interruptions required by COVID-19 public health orders;
- Have the ability to continue operations as a going concern, taking into account a potential program grant;
- Have experienced a loss of revenue or unexpected expenses substantially caused by COVID-19;
- Are in good standing with the Ohio Secretary of State, the Ohio Department of Taxation, and any other governmental entity charged with regulating the business; and
- Have fully utilized all other government support (including both grants and loans).
However, there are small businesses that are automatically ineligible for a grant, which are businesses that are:
- Publicly traded;
- Operated by a governmental agency or entity;
- Engaged in political or lobbying activities;
- Engaged in adult entertainment;
- Engaged in legal gambling or gaming;
- Majority interest owned by persons under the age of 18;
- Hospitals, private schools, or long-term care centers;
- Cannabis businesses;
- Engaged in the distribution of liquor, not including restaurants and bars;
- Sellers of tobacco or vaping products;
- Utility providers; and
- Financial institutions.
What are the eligible uses of funds from a Small Business Relief Grant?
Funds from the grant can be used to reimburse a qualifying business for the following expenses incurred between March 22, 2020, and the date of the application:
- Personal protective equipment used to protect employees, customers, or clients from COVID-19;
- Measures taken to protect employees, customers, or clients from COVID-19;
- Mortgage or rent payments for a business premises (personal residences are excluded);
- Utility payments;
- Salaries, wages, or compensation paid to employees or contractors, including an employer’s share of health insurance costs; and
- Business supplies or equipment.
How does a qualifying business apply for a Small Business Relief Grant?
A qualifying business will need to submit an application for the program online through the Ohio Development Services Agency at businesshelp.ohio.gov. In addition to usual business identifying information (business name, address, employer identification number, etc.), qualifying businesses will need to provide documentation evidencing proof of employment, proof of business expenses incurred in the 60-day period prior to the application submission, and a copy of the applicant’s most recently filed federal or Ohio income tax return.
Applications were first available to qualifying businesses beginning November 2, 2020. The first $44 million of the program’s funding shall be allocated equally to each of Ohio’s 88 counties ($500,000 per county). So about 50 businesses per county will receive these funds on a first-come, first-served basis. The remaining $81 million will be awarded on a first come, first served basis regardless of the business’ location in Ohio.
This client alert is intended for informational purposes only and is a non-exhaustive overview of Ohio’s Small Business Relief Grant program. It should not be relied upon as legal advice. Please consult with your SMDK attorney to provide you with advice specific to your situation.