Pandemic Grant Opportunity for Arkansas Hospitality & Service Businesses
The Arkansas Department of Parks, Heritage and Tourism, the Arkansas Economic Development Commission, and the Arkansas Department of Finance and Administration recently received approval from the Arkansas Legislative Council to proceed with a grant program that utilizes $50 million in CARES Act funds for Arkansas businesses in certain industries impacted by the COVID-19 health crisis.
This "business interruption grant" is targeted to Arkansas businesses in the personal care, tourism, travel, recreation and hospitality industries, and will be used to reimburse a qualifying business for certain eligible expenses that were incurred between March 1 and September 30, 2020.
Given the importance of tourism to the State of Arkansas, these grants could be vital to the continuation and very survival of many Arkansas businesses, and by extension, to the overall economic health of the state.
The grant application period doesn't open until Monday, November 16, and then only for a very limited time. The application period will close on Wednesday, November 25. Given the relatively short application period, it behooves businesses that plan to apply to begin gathering information and preparing now.
It is anticipated that the grants will be awarded in late December, and the awards will be prorated among the recipients based on the number of applicants and the amount of reimbursement requested, i.e., it is not a first-come, first-served type of program.
While there are numerous specifics, in general to be eligible, a business must be a for-profit corporation, partnership, sole proprietorship (including independent contractors), limited liability company, joint venture or non-profit 501(c)(3) organization having 250, or fewer, full-time Arkansas employees as of September 30, 2020. As alluded to earlier, the business must operate primarily within the Arkansas personal care, tourism, travel, recreation, hospitality or related industries in order to qualify.
A further condition is that "current economic uncertainty" makes the assistance necessary to support the ongoing operations of the business. Economic uncertainty is defined by the program as "conditions, due to the impact of COVID-19, where the reasonable financial basis upon which the continuing long-term operations of the business are uncertain if grant program assistance is not provided."
In other words, the viability of the business is very much in question unless assistance is obtained.
Eligible expenses that can be reimbursed are those incurred and associated with COVID-19 mitigation or certain listed business interruption expenses due directly to local, state or federal government COVID-19 directives. In general they are:
1) Business expenses incurred as a direct result of COVID-19 mitigation;
2) Certain ordinary business expenses incurred as a direct result of a government mandated business closure or restriction due to COVID-19; or
3) Business expenses incurred due to diminished capacity of operations that are likely to continue until health conditions allow functioning at full capacity.
While not an exhaustive list, this includes such expenses as utilities, business insurance, interest on business debts, payroll costs, licenses and fees, and maintenance and repairs, among others.
The program also has a stated goal of granting at least 15 percent of all funds to "Minority Business Enterprises and Women-owned Business Enterprises, both defined as having at least 51 percent of the business owners being a minority (as defined by Arkansas statute) or women, whichever is applicable.
Interestingly, one of the factors that will be used to assess overall economic impact of Covid-19 on the business will be sales tax data (for those required to collect sales tax) comparing sales tax collections for the time period March 1 through September 30 in 2019 and 2020. For businesses that do not collect sales tax or were in existence as of March 1, 2020 for less than one year, other data will be used, such data as yet to be determined.
More information regarding this grant program, including specifics regarding eligible businesses, specific expenses that do qualify for reimbursements as well as those that do not qualify, required documentation for the application and much more can be found at www.Arkansas Ready.com. Locate "Service and Hospitality Industries Grant" on that web page and click on the "Learn More" button.
