Due to the tremendous financial impact that the COVID-19 pandemic has had on many of Ohio’s small businesses, Ohio Governor Mike DeWine recently announced two new relief programs that will be administered through the Ohio Development Services Agency. The Small Business Relief Grant (the “SBR Grant”) is a program designed to assist certain small businesses negatively impacted by COVID-19 by providing them with $10,000 grants from a $125 million fund. The Bar and Restaurant Assistance Fund (the “Bar Fund”) is comprised of $38.7 million to give eligible liquor license permit holders $2,500 grants because of the significant impact COVID-19 has had on said licensees. Applications for both will be accepted online, starting November 2, 2020, through the Ohio Development Services Agency portal at https://businesshelp.ohio.gov/. Although more information regarding each of these programs will likely be released in connection with the application process opening, below are preliminary details that businesses can use to determine whether they are eligible and what the application process will entail.
Businesses Eligible for the Small Business Relief Grant
Not every small business may receive an SBR Grant; only a business that meets the following criteria will be eligible:
- The business must be a for-profit entity with no more than twenty-five (25) total or full-time equivalent Ohio employees;
- The business must have a physical location in Ohio and derive at least ninety percent (90%) of its annual revenue based on activities performed in and taxable in Ohio;
- The business must have been in continuous operating since January 1, 2020 (except for government-mandated COVID-19 orders) and has the ability to continue operations as a going concern;
- The business must be in good standing with the Ohio Secretary of State, the Ohio Department of Taxation, and any other governmental entity charged with regulating the business;
- The business has experienced revenue loss or incurred unplanned costs substantially caused by COVID-19 and a grant is necessary to help it recover from the impact of COVID-19; and
- If applicable, the business has fully utilized any other government support received (including both grants and loans) by the applicant business for business expenses incurred due to COVID-19 or that can be utilized for business expenses incurred due to COVID-19.
Businesses that are not eligible for an SBR Grant include publicly traded entities, clubs, businesses engaged in the sale or distribution of liquor (excluding bars and restaurants), tobacco or vaping products, and gambling institutions, among others. Therefore, bars and restaurants may be eligible for both an SBR Grant as well as the Bar Fund (as further explained below).
Application Process and Eligible Uses for Small Business Relief Grant Funds
A business is only eligible to receive one grant under the SBR Grant program, and all entities with the same FEIN will be treated as a single business for the purposes of the determining program eligibility. With respect to the SBR Grant application, the Development Services Agency will require businesses to supply specific details and documentation concerning the business, which shall include the following:
- Number of W2 employees as of January 1, 2020, including documentation to support said number;
- Documentation to verify that the applicant business has incurred business costs during the 60-day period prior to the application being filed; and
- The business’s most recent Federal or State income tax return.
In addition, by completing and signing an application, a business certifies to the Development Services Agency and to the State of Ohio that the information, representations and certifications set forth therein are true and correct. Knowingly making a false statement on an application may subject a business to fines and/or other civil and criminal penalties.
If an application is approved and a business receives an SBR Grant, the proceeds may be used to reimburse eligible expenses associated with COVID-19 that were incurred between March 22, 2020 and the date their application was submitted. Eligible expenses include the following:
- Business supplies or equipment, including personal protective equipment for employees, customers and clients, and measures taken to protect employees, customers, or clients from COVID-19;
- Mortgage or rent payments for business premises;
- Utility payments; and
- Salaries, wages, or compensation paid to contractors or employees, including employer’s share of health insurance costs.
Costs for non-COVID related expenses are ineligible, in addition to costs incurred for tax obligations, non-business purposes, political purposes, and costs for which the business has or will receive reimbursement from another source, including any other government loan or grant program and insurance proceeds.
Awarding Small Business Relief Grant Funds
To ensure that small businesses in each of Ohio’s 88 counties receive SBR Grants, $44 million has been set aside to provide 50 businesses in each county with funding. Once a county’s allocation has been depleted, businesses will be allocated the remaining $81 million in funds regardless of their location in Ohio. In either case, applications will be approved on a first-come, first-served basis.
Businesses Eligible for Bar and Restaurant Assistance Fund
The Bar Fund was established to provide relief to 28 different liquor permit types, as shown below, which include those for bars, restaurants, breweries, distilleries, wineries, casinos and private clubs:
Licensees with any of the above-listed permits must have an active on-premise permit as of the close-of-business on October 23, 2020, however, the business does not have to be currently open. The status of a permit can be verified through the Ohio Division of Liquor Control’s online portal at https://www.comapps.ohio.gov/liqr/liqr_apps/PermitLookup/PermitHolder.aspx.
Because bars and restaurants may also be eligible for an SBR Grant, liquor permit holders could potentially receive a grant from the Bar Fund as well if they meet the specific requirements for each.
Application Process and Eligible Uses for Bar and Restaurant Assistance Funds
As part of the Bar Fund application process, a licensee will need to submit its FEIN or SSN, and liquor permit number and address for each unique location. Applications will be accepted through December 30, 2020, and after applying, a licensee will receive $2,500 per unique business location.
Once a licensee receives funds, said funds are to be used on COVID-related expenses due to business interruptions caused by the pandemic.
Adam Glassman is an attorney at the Cleveland, OH-based law firm McCarthy, Lebit, Crystal & Liffman.