In order to support economic recovery from the COVID-19 pandemic, local governments can apply for funding federally to enrich the small businesses in their communities. The State and Local Funds Fiscal Recovery Program (SLFRF) makes $350 billion available so that communities can not only recover, but flourish, after suffering impacts from the pandemic. For a business to be eligible for SLFRF funding, it must qualify as a small business in the United States (per the Small Business Association and section 3 of the Small Business Act) and have been affected by COVID-19 economically. Local governments can choose to apply for singular small businesses or classes thereof.
Local governments can identify impacted small businesses in their communities through a variety of means, including but not limited to:
- Decreased revenue or gross receipts
- Increased costs
- Financial insecurity
- Capacity to weather financial hardship
- Challenges governing payroll, rent/mortgage, and other operating costs
For impacted small businesses, local governments can provide three routes of relief. First, local governments can use SLFRF funding to provide loans or grants to impacted small businesses in their communities. These loans or grants can be used to support employee payroll and benefits, rent mortgage, utilities, and other operating costs. SLFRF funding can also be used to provide services to support business planning, such as technical assistance, counseling, or other services.
The Department of the Treasury, which published the guidelines for SLFRF funding, also defines a secondary category of impacted small businesses—disproportionately impacted small businesses. A disproportionately impacted small business, according to the Treasury, can be identified by operating in a Qualified Census Track or a US territory, or operated on Tribal lands (or by Tribal governments).
Additional enumerated uses of SLFRF funding to aid disproportionately impacted small businesses have been defined in the Final Rule of the SLFRF. They are:
- Rehabilitation of commercial properties, storefront improvements, and façade improvements
- Support for microbusinesses, including financial, childcare, and transportation costs
- Technical assistance, business incubators and grants for start-ups
- Expansion costs for small businesses
A list of allocations to county governments can be found here, and a list of allocations to metropolitan areas can be found here. For further information regarding SLFRF funding for your small business, contact your state and local governments.