Financial Relief Program Announced for Maine Small Businesses and Nonprofits
Co-authored by Nicholas Smetana
Maine small business owners and nonprofit organizations in need of short-term financial relief should act quickly to receive potential funds which may be available to them through a new $200 million state-wide grant program administered by the Maine Department of Economic and Community Development (DECD).
The State of Maine has pledged to utilize its CARES Act relief funding by offering targeted relief at the local level for qualifying small businesses seeking to remain viable during the pandemic.
What types of businesses qualify (and don’t qualify)?
- The relief is available for Maine-based businesses and nonprofit organizations in good standing that demonstrate a need for financial relief based on lost revenues, minus expenses incurred since March 1, 2020 due to the impact of COVID-19. Qualifying businesses must demonstrate an expected 20% loss in revenue, minus expenses for 2020 and have no more than 50 employees at any time during the year.
- The following business types are ineligible for relief under the program:
- Professional services (certain professional services such as advertising, marketing, and design may qualify)
- 501(c)(4), 501(c)(6) organizations
- K-12 schools, including charter, public and private
- Municipalities, municipal subdivisions, and other government agencies
- Assisted living and retirement communities
- Nursing homes
- Foundations and charitable trusts
- Trade associations
- Credit unions
- Insurance trusts
- Scholarship funds and programs
- Adult entertainment
- Country clubs, golf clubs, and other private clubs
- Cemetery trusts and associations
- Fraternal orders
- Hospitals, nursing facilities, institutions of higher education, and child care organizations
What are the benefits?
- An eligible applicant may receive a grant of up to $100,000 to be used towards critical business and organizational expenses such as:
- Payroll costs and expenses;
- Rent or mortgage payments for business facilities (unless otherwise waived by lessor/lender);
- Utilities payments;
- Purchase of personal protective equipment required by the business;
- Business related equipment;
- Investments that will support your organization’s long-term sustainment;
- Expenses incurred to replenish inventory or other necessary re-opening expenses; and
- Other necessary operating expenses
- Qualified applicants will receive notice of the receipt of an award by September 30, 2020 and will obtain awarded funds as soon as October 1.
What are the limitations?
The program places limitations on the types of businesses that may be eligible to apply as well as the allowable expenses for which the funds may be used. Awarded funds are deemed to be reportable income for tax purposes and generally will be subject to income tax in the tax year received. Any awarded funds must be spent on operations strictly within Maine. Although not a competitive application process, awards for recipients will be pro-rated based on the magnitude of reported losses by all Maine applicants.
What do we need to do to apply?
Act quickly! Applications must be submitted online by September 9, 2020. Links to the application, along with detailed instructions and answers to frequently asked questions, can be found on the DECD website: (https://www.maine.gov/decd/economic-recovery-grants).
Any business that may qualify to receive a grant should complete and submit the application as soon as possible. This program offers Maine businesses an opportunity to obtain grant-based relief to help alleviate disruptions to business during the COVID-19 pandemic. We continue to monitor ongoing updates to the program and announcements made by the DECD. If you have questions about your qualification for the program or would like more information, please contact your BNN advisor at 800.244.7444.
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.