Customers Tim Beinz and John Kuentz walk into a restaurant Monday, March 16, 2020, in Richmond, Va. The two are part of a construction crew.
(The Center Square) – Some small Virginia businesses welcomed news that the state was releasing $70 million to help during COVID-19 restrictions, but business groups are still concerned about the economic impact of continued regulations.
The money will be made available through grants for small businesses that have been hurt by COVID-19-related regulations through the newly announced Rebuild VA economic recovery fund. The fund will award up to $10,000 to about 7,000 applicants to cover eligible expenses, which include payroll support, employee salaries, mortgage and rent payments, interest payments on loans and costs for personal protective equipment and other materials required to address the COVD-19 pandemic.
To be eligible for a grant, businesses must have no more than 25 employees and generate no more than $1.5 million in gross revenues annually. Eligible businesses include restaurants, retail outlets deemed non-essential, entertainment and fitness outlets, among other things. A business will only be eligible for these funds if it has not received any Paycheck Protection Program (PPP) loans, Economic Injury Disaster loans or CARES Act funding.
“As the pandemic goes on much longer than anyone expected and restrictions remain in place for many small businesses, it becomes much more difficult for them to stay afloat,” Nicole Riley, Virginia State Director for the National Federation of Independent Business, said. “These grant funds are welcome and desperately needed because the rent is still due, the utility bills keep coming, payroll must be met, and there is a lot of juggling going on.”
Although the grants will assist small businesses, Riley said the governor should open the grants up to businesses who already have received COVID-19-related funding or he should find money elsewhere to provide additional funds for those businesses. According to an NFIB survey released Monday, 71 percent of businesses the organization represents nationally have used up all of their PPP loans and nearly half of them anticipate they will need more funding within the next six months.
“This is especially true when the number of customers has been limited by the governor’s orders, like restaurants who can only serve half as many diners, and those in hit hard businesses such as gyms, nonessential retail, travel, or those who put on events,” Riley said.
Although Northam loosened regulations on these businesses, he still mandates social distancing, which prevents many of them from operating at full capacity. Because of an uptick in COVID-19 cases, he also said he will consider taking the state a step backward and implement more restrictions.
In a statement, Northam said small businesses are the backbone of Virginia’s economy and the bedrock of its communities.
“Rebuild VA will help address the vast challenges that small businesses and nonprofits across our Commonwealth are facing as they work to recover from the COVID-19 pandemic,” Northam said. “Because many of the affected small businesses and nonprofits are located in distressed and economically disadvantaged areas of Virginia, we are designating a portion of this funding to ensure they get the support they need.”
Half of the funds will be provided to businesses in low-income and economically disadvantaged communities to ensure equity for minority-owned and women-owned businesses, according to the governor’s office. The Department of Small Business and Supplier Diversity will administer the funds and hold several webinars for prospective applicants.