The Indiana Department of Economic Development on Wednesday said it was changing the eligibility requirements for a $31 million grant program to help small businesses struggling during the pandemic, in hopes of generating more applications.
The state launched the Small Business Restart Fund in June to help companies with fewer than 50 employees cover the costs of pandemic-related expenses such as rent or mortgage payments, utility bills, lease payments for real or personal property, and safety costs, including personal protective equipment and infrastructure improvements.
Most of the funding for the program—$30 million—came from the $2.4 billion the state received from the federal Coronavirus Aid, Relief, and Economic Security Act. The city of Indianapolis chipped in $1 million of its CARES Act funding for Marion County businesses.
But, to date, fewer than 500 applications have been received, with about $1 million being awarded to 246 small businesses, including 46 owned by minorities and 59 owned by women, in 83 counties.
IEDC Chief of Staff Luke Bosso told IBJ that the low number of grants awarded so far could likely be attributed to a rule that prevented businesses that qualified for the federal Paycheck Protection Program from applying for the Restart Fund.
“That was really the biggest barrier,” Bosso said.
Businesses that received federal support through the Economic Injury Disaster Loan or Community Development Block Grant programs also didn’t qualify for the Restart Fund.
The state initially designed the program that way because it was meant to complement the federal assistance. About 83,000 businesses in Indiana received $9.5 billion in Paycheck Protection Program loans.
Under a change announced Wednesday, the state will now allow businesses that received federal assistance, such as the PPP loans, to apply for the Restart Fund grants. The deadline to apply has been extended from Sept. 30 to Nov. 1 for small businesses in Marion County and until Dec. 1 for businesses outside of Marion County.
The CARES Act requires the state to spend its $2.4 billion allocation before the end of the year, so the $30 million in the Restart Fund would need to be distributed by then unless Congress acts to change the parameters of the funding. State officials have been hopeful that the deadline to spend the funding would be extended, but Congress has failed to reach any agreement.
Other eligibility requirements, including that a business must have revenue of less than $5 million and experience at least a 40% drop in revenue because of the pandemic, will still apply. Businesses from any sector are eligible.
Bosso said it’s possible the state would consider increasing the maximum number of employees a business can have in order to qualify, but for now, the cap remains at 50.
“I think there will be a good amount of interest,” Bosso said.
The grants are up to $2,500 per month for four months, with a cap of $10,000. A business that has seen an 80% drop in revenue could receive $5,000 per month, but the maximum total grant is still $10,000.
At least $5 million of the $30 million has been reserved for minority- and woman-owned businesses.