On October 22 the Baker Administration announced a $774 million economic recovery plan. The plan has a variety of elements including a $50.8 million fund available to small businesses in the form of grants.
The grant program will be administered by Massachusetts Growth Capital Corporation (MGCC). Eligible companies may apply between October 22, 2020 and November 12, 2020. Further information and links to the applications are available on MGCC’s website.
The grant program is split into two tranches based on the number of employees of the business. The first program is for businesses with five or fewer employees (the “Five Employee” program). The second program is for businesses with 50 or fewer employees (the “50 Employee” program). In both cases owner(s) are included in the employee count. The 50 Employee program specifies 50 or fewer full-time equivalents (FTE). The Five Employee program does not use the FTE language, suggesting that any employee, full or part-time, counts as a single employee.
Both programs are intended to help businesses adversely impacted by the pandemic. Both also specify that preference will be given to businesses whose owners are women, minorities, veterans, members of other underrepresented groups, who focus on serving the Gateway Cities of Massachusetts and those most impacted by the pandemic. Preference is also indicated for those businesses that have not yet received aid from other federal programs related to COVID-19.
Grants may be awarded up to $25,000 and $75,000, respectively, for each program. (A business can only apply for one grant.) The use of funds from the 50 Employee program is limited to employee payroll and benefits, mortgage interest, rent, utilities and interest on other debt. The Five Employee program uses a broader definition—including working capital to include the items from the second program and general support, funds to stabilize the business, and purchasing of personal protective equipment. In both cases, non-approved uses of funds include major equipment and real property purchases, construction activity, business expansion and lobbying. Critically, these funds may not be used to pay expenses if another source of financial aid (i.e., PPP loans) has paid that same expense.
The Five Employee program requires that businesses provide goods or services to multiple clients or customers and their owners must qualify under the Low-Moderate Income Limited Clientele national objective criteria. They must earn an annual income equal to or less than 80% of the Area Median Income based on family size. The 50 Employee program does not include those requirements for participation.
Both programs require applicants to have a physical establishment in Massachusetts, to be a for-profit entity and to be able to document a loss of income equal or greater than that requested due to COVID-19, among other requirements.
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