OCEAN CITY — Stemming the spread of the COVID-19 virus remained the focus of Gov. Larry Hogan’s actions announced on Monday, but the governor and his staff also announced an expansive $175 million relief package to help the state’s small businesses weather the storm.
The federal U.S. Small Business Administration has already ramped up programs for businesses struggling or expecting to struggle as a result of the crisis and Maryland is rolling out an aggressive program of its own to the tune of around $175 million. During his press conference on Monday, Hogan acknowledged his executive orders will strain nearly every facet of the economy and characterized the state’s efforts as fighting “twin battles.”
“We know that the steps we’ve taken to protect the health and well-being of all Marylanders have made a significant impact on our business community,” he said. “Today, in addition to funding through the U.S. Small Business Administration, we are making new financial assistance programs available to help our businesses continue to operate during this unprecedented crisis. These programs will offer the kind of much-needed support our businesses need right now and help them to pay bills and retain their workforce as much as possible.”
Meanwhile, the federal government continues to grapple with relief packages for businesses and stimulus packages for individuals and families. While the U.S. Senate and House of Representatives thus far have put on a unified face for the most part in the handling of the crisis, partisan bickering has already begun to rear its ugly head. Hogan on Monday urged federal leadership to get past politics as usual and start closing in on a real relief package.
“The states continue to need more action,” he said. “We need Congress to take action and this is no time for partisan dysfunction. It will take all of us working together.”
In the meantime, Hogan said Maryland was not going to stand by and wait for the federal government to take action. To that end, he announced a series of relief packages for the state’s small businesses.
“Maryland is not going to wait to take action,” he said. “We’re making relief available through a $175 million comprehensive relief program. Small businesses can immediately begin applying for some of these low-interest loans and grants.”
Maryland Commerce Secretary Kelly Schulz said is working closely with small businesses from all over the state to get them the resources they need to weather the crisis.
“It is our top priority to support out business community as much as we can during this difficult time,” she said. “We have heard from hundreds of businesses about their greatest need right now, which is working capital, and designed these programs to have the most significant impact possible.”
Shulz said her department and the state government is tirelessly working on assistance programs to provide relief for small businesses.
“I assure you our teams are working around the clock,” she said. “We’re in unchartered waters. This is unlike anything we’ve seen in our lifetimes. Maryland businesses want to continue to service their customers and keep their employees and keep paying employees. These programs can help all of us get through this.”
Shulz said the eligibility and application process for the various programs are being streamlined to get small businesses the help they need fastest, pointing to the emergency relief loan fund as an example.
“The $50,000 loan is flexible funding that can be used in a variety of ways to keep Marylanders working,” she said. “It’s a simple application and in some cases relief can be obtained as quickly as two working days. We’re talking to our federal partners daily and that will allow us to expand these programs further. We’re cutting through the red tape to get Maryland businesses the help they need.”
The various relief loans and grants programs are up and running and more details are available on the state’s website. The following are some of the highlights of the relief programs being offered:
Maryland Small Business COVID-19 Emergency Relief Loan Fund
The $75 million loan fund available to for-profit businesses only offers no interest or principal payments for the first 12 months up to $50,000. It would convert to a 36-month term loan of principal and interest payments with an annual interest rate of 2%. The eligible uses of the loans would include working capital to support payroll expenses, rent or mortgage payments, utility expenses or other similar expenses that occur in the ordinary course of operations. To be eligible for the loans, a business must demonstrate the financial stress or disrupted operations caused by the pandemic.
Maryland Small Business COVID-19 Emergency Relief Grant Program
Unlike the aforementioned emergency relief loan fund, this grant program would be just that- a grant. The COVID-19 grant fund offers working capital to Maryland small businesses and non-profits with disrupted operations due to the pandemic. Grants up to $10,000, not to exceed three months of cash operating expenses for small businesses and non-profits would be available under the program.
Eligible businesses would have to be in operation before March 9, 2020 and be in good standing. Eligible businesses can have annual revenue not exceeding $5 million and the business or non-profit would be expected to seek longer term relief through the SBA or other lending source. The eligible uses for the grant program include payroll expenses, rent or mortgage payments, utility expenses or other daily operating costs.
COVID-19 Layoff Aversion Fund
Hogan and the Department of Labor have launched a new COVID-19 Layoff Aversion Fund, which is designed to support businesses undergoing economic stress due to the pandemic by preventing or at least minimizing the duration of unemployment resulting from layoffs. The award, which could be up to $50,000 per applicant, will be a quick deployable benefit that can be customized to the specific needs of a business to minimize the need for layoffs.
The uses of the benefit are many. For example, the benefit could be used to cover the cost of purchasing remote access equipment such as computers, printers of software etc. to allow employees to work remotely from home where possible versus being laid off. The funds could also be used to cover the cost of cleaning or sanitization services so small businesses would be able to keep employees at work on site.
The funds could also be used to pay for liability insurance for restaurants, for example, that were forced to close but have converted to a delivery operation while under the state of emergency. Essentially, the program will allow businesses to adopt other creative approaches and strategies to reduce or eliminate the need for layoffs.
