MA to Provide Small Business Grants to COVID-19 Distressed Businesses

Oct 22, 2020 | Covid-19

The Commonwealth of Massachusetts has made $50.8M in grants available for small businesses, businesses that employed more than 1.5M workers, accounting for more than 45% of the total workforce in Massachusetts. These funds were appropriated in the Governor’s supplemental budget package as well as remaining CARES Act money. These small business grants will provide up to $75,000 for those small businesses impacted by the COVID-19 pandemic. The small business grant funds can be used for employee payroll and benefit costs, mortgage interest, rent, utilities and interest on other debt obligations. Applications for small business grant funding are now being accepted and close on November 12, 2020.

Secretary of Housing and Economic Development, Mike Kennealy, stated that these grant funds are intended for the state’s “most vulnerable” small businesses “that have nowhere else to turn.” These are small businesses that may not have been able to take advantage of the federal PPP program, a capital loan program that operated in a way that often benefited larger, more established businesses with stronger banking relationships. In contrast, the Massachusetts small business grant program provides grants, not loans and is administered by the Massachusetts Growth Capital Corporation, a public corporation housed within the Executive office of Housing and Economic Development.

Massachusetts’ small business grant program is only available to certain small businesses, including those that are no longer operating due to COVID-19 but intend to reopen. Preference will be given to small businesses whose owners are women, minorities, veterans, members of other undefined “underrepresented groups”, who are focused on serving the Gateway Cities of Massachusetts. Preference will also be given to those small businesses with the “greatest need” who have been most negatively impacted by the COVID-19 pandemic and which have not been able to receive aid from other federal programs.

The program does not define how “greatest need” will be determined, suggesting that small businesses that apply for the grant funds may encounter some confusion on this point. Secretary Kennealy commented that unlike a $20M grant program initiated in March which was dispensed on a first-come, first-serve basis, this round of grant funding will be needs-based and focus on specific criteria addressing those small businesses “hit particularly hard”. The Secretary further commented that the GCC will focus on those industries and communities most impacted and might include those businesses that have not yet had a chance to reopen.

Funding is provided through two programs based on the size of the business, one for small businesses with 5 or fewer employees providing grants up to $25,000, and another for small businesses with 50 or fewer full-time equivalent employees providing grants up to $75,000. Businesses who seek funding must show documented losses of income. Businesses must have opened prior to June 30, 2019 and have a physical establishment in Massachusetts. Businesses must be in good standing in Massachusetts, current on all taxes due through March 1, 2020, with valid licenses or registrations and not a party to any lawsuit involving the Commonwealth or the municipality in which it operates.

Ineligible businesses include chain businesses, real estate rentals/sales businesses, liquor stores, cannabis-related businesses, firearms dealers, lobbyists and businesses owned by minors.

After the 3-week application period closes, Massachusetts Growth Capital Corporation will review all applications to determine eligibility. MGCC will award and disburse grants based upon eligibility criteria and preference prioritization.

If you or your business need assistance in applying for this or other available grant programs, contact CMBG3 Law today and ask to speak with our talented attorneys and legal staff to help you prepare your application, as well as discuss other sources of COVID-19 relief that may be available to you.


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