Bill Creating Programs Through EDA to Financially Support Local Small Businesses Wins Approval

  • Ernice Gilbert
  • September 25, 2020
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Small businesses struggling to stay afloat as a result of the Covid-19 pandemic may soon receive a financial lifeline from the local government, following the passage on Thursday in the Committee on Finance of Bill No. 33-0410, an Act providing for the disbursement of funds to the V.I. Economic Development Authority to establish a "Small Business Relief Grant Program" and a "Covid-19 Disaster Loan Program".

Funding for the bill will be provided through the $75 million in CARES Act monies provided to the local government by Congress. 

The two programs offer varying levels of funding. The grant program for example, will have a total of $7 million to expend; it only provides up to $10,000 to a business and must adhere to the following guidelines: 

  • Valid business license 
  • Certificate of good standing or certificate of existence 
  • Must have been in operation prior to March 1, 2020
  • Gross Receipts that have not exceeded $225,000
  • Grant may not be used to meet any expenses met by the Small Business Administration, Paycheck Protection Loan Program, the state's share of medicare, damages covered by insurance, or payroll benefits to employees whose work duties are not substantially dedicated to mitigating or responding to public health emergencies.

 

The loan program on the other hand will have a total of $4.5 million to expend, and will be used to provide low-interest loans of up to $50,000 per business. The interest rate on the loan cannot exceed 1 percent.

Additionally, the loan may be forgiven if the borrower meets the following criteria: 

  • Granted employees paid leave
  • Maintained payroll expenses
  • Experienced increased cost of materials or otherwise increased inventory
  • Mortgage, lease, or rent payments cannot be met due to revenue loss

 

The bill calls on the EDA to provide the Legislature with a status report on the programs' execution no later than November 15. The report should detail the progress of the programs and the EDA must submit a final report no more than 60 days after the Dec. 3 deadline to apply.

The bill was sponsored by Senators Donna Frett-Gregory, Kurt Vialet and Janelle Sarauw.

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