Rule Changes Make It Easier to Apply for Main Street Recovery Grant
NEW ORLEANS – Who knew it was this hard to give away $275 million?
The Louisiana Main Street Recovery grant program debuted in late July as a way to distribute some of the state’s $1.8 billion in federal CARES Act relief funds to small businesses in the state who have incurred expenses due to the COVID-19 pandemic. The program’s creation was a victory for Louisiana Republicans, who advocated for using the money this way instead of sending it to state and city governments.
So far, though, the distribution of funds has been going more slowly than expected.
“It is concerning to me that we put this kind of money aside for small businesses and so little has been used,” said Rep. Barbara Frieberg, a Baton Rouge Republican, during a legislative meeting on Monday.
The Department of Treasury, which runs the program, said that just under 4,000 small business owners have received funds so far. The average grant size is about $9,000 and the average wait time is a “few weeks” More than 6,000 applications have been rejected, meanwhile. One of the reasons is that applicants hadn’t correctly filed taxes or an extension for 2018 or 2019.
$29 million has been dispersed and another $63 million is “in the pipeline” to be paid, so that leaves another $184 million available before the program ends on Nov. 30. Of the grants that have been awarded or approved, $34.2 million has gone to businesses owned by minorities, women or veterans. The stated goal is to reach at least $40 million.
Use 2019 Taxes to Apply for ‘Quick Relief’
The Department of Treasury said it has made two major changes to the Main Street Recovery program to make it easier for people to access the funds.
First, small business owners who filed tax returns last year may now use those returns to estimate their expenses rather than show receipts.
“There are two aspects of the program that are eligible expenses,” said Rachael Higginbotham of Postlethwaite & Netterville, the accounting firm that’s administering the program, during a Sept. 14 Zoom call hosted by Greater New Orleans Inc. “The first is pandemic-related costs: things like extra cleaning, signage and personal protective equipment. Those are costs associated with meeting public health requirements but there’s a second set of costs that are defined as business interruption expenses. That’s rent, utilities, payroll and all of those normal business operating costs. Quick relief is based off of business interruption expenses only so that’s why we’re looking at 2019 taxes because we’re assuming your businesses expenses from last year are similar to those from this year and that your business interruption calculation can be based off of last year.”
Definition of ‘Physical Location’ Has Been Broadened
Another big change is that administrators are re-interpreting the rule that applicants must “have customers or employees visit a physical location.”
Now, the litmus test is whether or not you interact face-to-face with customers in any location. For example, electricians and plumbers interact with customers at a home or place of business, so they would qualify, but purely online businesses do not interact face-to-face with customers so they don’t.
“I have a cousin who buys fishing lures and then sells them online,” said Higginbotham. “He’s not eligible because he never meets with customers or employees in person but a lot of others that may not have a physical storefront would be eligible.”
On the Sept. 14 call, Schroder delivered a clear message: if you’ve applied and been rejected, apply again now that the new rules are in place. And if you haven’t applied yet, now’s the time to get it done.
“We’re doing about $3 million a day now so it’s coming along,” he said. “Our biggest problem, honestly, is how many applications that we have that have been denied. We have a large amount that are denied for not filing taxes, not being current with the Secretary of State or not telling the truth when asked the question, ‘Have you received any prior aid?’ My ask today is to please spread the word. We have several hundred thousand businesses out there that have done all the things they’re supposed to do – file their taxes, going to work every day, doing what they need to do to survive – and they could use this money.”
Click here to apply.