The Michigan Economic Development Corp. plans to open applications next week for the $58.5 million in grant funding to aid small businesses and entertainment venues that were closed or curtailed by the most recent state-ordered restrictions in response to the COVID-19 pandemic.
MEDC CEO Mark Burton expects high demand for the “desperately needed relief” grants, the state’s latest effort to provide aid to small businesses.
“There continues to be an overwhelming need for relief from the economic impact of COVID-19 from small businesses all across the state. While Michigan continues to see progress from public health restrictions compared to other states, we also recognize that many of our small businesses have made significant sacrifices over the course of this effort to save lives and to repeatedly flatten the curve,” Burton said during a conference call today. “As a result, our small businesses continue to need emergency support and perhaps now more than ever during these winter months.”
Both grant programs — $55 million for small businesses and $3.5 million for entertainment venues — are also based on need and are not first-come, first-served, Burton said. The MEDC expects funding from approved grants to begin flowing by the end of January.
The Michigan Strategic Fund Board this afternoon voted to formally authorize both grant programs, made available through a COVID-19 relief package that state legislators enacted in late December and Gov. Gretchen Whitmer signed into law.
Under the $55 million Michigan Small Business Survival Grant Program that’s modeled after similar efforts last year, the MEDC will work with 15 local economic development agencies across the state to review applications and award funding.
Small business relief
Applications for the grants opens at 9 a.m. on Jan 19. The application process has a short window that closes at noon on Jan. 22.
The short application window for the Small Business Survival Grant Program stems from an expectation that demand will easily outstrip available funding because of a “far, far greater need that exists than any amount of resources that we are facilitating,” Burton said. Prior grant programs to provide relief for small businesses quickly depleted available funding, he said.
A $10 million grant fund in December “very literally was exhausted in minutes,” Burton said. Given the expected “enormous demand,” the MEDC opted to set a short application period, he said.
“We believe that the demand will continue to be extremely high and will continue to outpace any of the resources we’re making available,” Burton said. “It’s just experience that we have seen in the demand for these and keeping a window open longer. We don’t want to continue that sort of false hope almost when it comes to people putting in applications well beyond the funds being exhausted.”
Small businesses that “have realized a significant financial hardship because of the COVID-19 emergency” and have been temporarily closed because of state orders can get up to $20,000 in grant funding, according to an MEDC memo to Strategic Fund board members. Small businesses that remained opened but had their operations limited are eligible for a grant up to $15,000.
The grants are for small businesses with one to 100 full- and part-time employees and operate in an industry affected by state orders that can demonstrate a resulting income loss. Grant recipients can use the funding for working capital to cover payroll, rent, mortgage payments, utility expenses or other similar expenses.
Through the $3.5 million Stages Survival Grant Program, the MEDC will provide $40,000 in grant funding to live music and entertainment venues that were “negatively impacted by the COVID-19 virus and related measures to protect public safety,” according to a staff memo for today’s Strategic Fund board meeting.
Applications for the Stages grants opens at 9 a.m. on Jan. 21 and closes at noon on Jan. 28.
The Stages Survival Grant Program is designed for music and entertainment venues in the state with fewer than 30 employees full time and that were operating as of Feb. 29, 2020. Eligible venues include those that generated at least 33 percent of 2019 gross revenues from live music or ticket sales, or at least 70 percent through cover charges, ticket sales, production fees, nonprofit educational initiatives, or sale of beverages, food, and merchandise at events, and had revenue in the second quarter of 2020 that was no more than 10 percent of the second quarter of 2019.
Venue operators must not have a majority ownership by an issuer of securities listed on a national security exchange, or own venues in more than one country or in more than two states.
The Michigan Independent Venue and Promoter Association will accept, review and approve grant applications on behalf of the MEDC. If awarded under the Stages Survival Grant Program, live music and entertainment venues are ineligible for the Business Survival Grant program.
News coverage in the small business section of MiBiz is made possible by advertising support from the Small Business Association of Michigan. SBAM is the statewide and state-based association that focuses solely on serving the needs of Michigan’s small business community. This advertisement has no effect on editorial consideration in MiBiz.