CARES Act small business grants discussed

By Aila Boyd

aboyd@mainstreetnewspapers.com

The Botetourt County Board of Supervisors received a report on the small business grants made possible by the federal CARES coronavirus relief funds at its meeting last Tuesday.

Gary Larrowe, the county administrator, noted that the county is slated to receive $2.915 million of federal passthrough dollars as part of the CARES Act. Although plans have not been solidified about use of the funds, he said that use will likely fall into the following categories: internal use, money given to the three towns in the county, technology, and a small business incentive program.

The county noted that it is recommended that it use a portion of its allocation of CARES funds for a small business grant program. At the meeting, Economic Development staff said that it is seeking detailed guidance from Virginia regarding how the county can structure a small business grant program and that discussions on the matter are in the developmental phase.

Ken McFadyen, the director of Economic Development, described the grants as funds for small businesses to help offset the cost of business interruptions caused by COVID-19. “We can logically point to our retail stores, restaurants, lodging, and entertainment businesses that have had to close. They are the businesses that have been most impacted,” he said.

He noted that for the purpose of the grant program that small businesses will be defined as any business that has 100 or fewer employees, including sole proprietorships and limited liability companies and self-employed individuals, that is recognized as a licensed entity in Botetourt County that can demonstrate that it has been in business for at least two years. He added that nonprofit organizations aren’t eligible for the funds.

Dr. Richard Bailey, who represents the Fincastle District on the Board of Supervisors, questioned whether the two-year requirement was coming from the federal government or whether it was a requirement established by the county. McFadyen explained that it was established by the county. “That’s something we’ve come up with to show that we’ve got an established business,” he explained. “We need to be very careful that we’re working with established businesses in Botetourt and not those that may simply form as a result of the pandemic. We hate to think that way, but we’ve got to be prudent because we are accountable and liable for these dollars. Any grants that we make that should not have been made, we will be responsible for that.” Bailey urged McFadyen to consider reducing the requirement, which McFadyen said would be looked into.

At the time of the presentation, the components of the program that were under development included the following:

Eligible small businesses

  • Only for small businesses physically located and based in Botetourt County employing 100 or fewer employees

  • Sole proprietorships, LLCs, or self-employed individuals that are recognized business entities

  • Have experienced a COVID-19-related impact, specifically closure or suspension of business operations

  • Businesses need to have filed for business status through the Virginia SCC and have been in operation for at least two years from May 15, 2020, per SCC filing

  • Businesses must have been and continue to be in compliance and in good standing with all local ordinances during the previous two years, on the county tax rolls, be current on Botetourt County taxes/fees or other assessments, and have a current business license as required

Cash grant offered

  • Up to $5,000 maximum grant for a qualifying business of five or more employees; $3,500 maximums grant for three to five employees; and, $2,500 maximum grant for one to two employees

Use of grant funds

Professional services will be paid through this program, such as:

  • Legal, with the exception of filing for bankruptcy

  • Accounting

  • Marketing plan development and execution

  • E-commerce activities including point of purchase software and other necessary software or web services subscriptions

  • Website development and web services

  • Technology hardware is limited to $1,500 of any grant from the $5,000 limit. Computer, printer, camera, cash register (receipts will be reimbursed)

  • The project can also be used to purchase marketing activities such as advisements in print, digital, or radio/TV

During the pandemic, we’ve very much been feeling our way in the dark with how to assist businesses,” McFadyen said.

The funds will be allocated on a first-come, first-serve basis to Botetourt-based small businesses starting after the June meeting of the Board of Supervisors and will end on September 1 or when funds are depleted. All funds from the CARES Act will be required to be spent by the end of the fiscal year.

At the time of the meeting, McFadyen said that the body that will be tasked with administering the funds has yet to be determined.

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