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Maryland COVID-19 Small Business and Nonprofit AssistancePrint PDF
Maryland has announced a Small Business COVID-19 Emergency Loan Relief Fund (“Loan Relief Fund”) and Small Business COVID-19 Emergency Grant Relief Fund (“Grant Relief Fund”) to support small businesses and nonprofits during the COVID-19 crisis. The Funds assist businesses or nonprofits that can demonstrate financial stress or disrupted operations. Maryland also created a COVID-19 Layoff Aversion Fund (“Layoff Aversion Fund”) to assist small businesses and nonprofits to create remote work opportunities or assist with conversion to delivery services.
To apply for the Loan Relief Fund or the Grant Relief Fund, the business or nonprofit must have been created prior to March 9, 2020 and be in good standing with SDAT. The business or nonprofit must have fewer than 50, full time and part time employees to be eligible for either fund.
The business or nonprofit also must demonstrate that the COVID-19 crisis has affected it negatively. For example, the business may show decreased sales, an inability to pay loans, an inability to pay employees, an inability to pay rent, notices from tenants of an inability to pay rents, increased sanitization costs, or notice of a disrupted supply network leading to a shortage of critical inventory or materials.
The business or nonprofit must provide two years of historical financial statements, including the most recent interim financial statement. There are no collateral requirements for either the loan or the grant.
Eligible uses for funds received from the Loan Relief Fund or the Grant Relief Fund include working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations. There is no additional guidance for what constitutes permissible other similar expenses currently.
Maryland allocated $75 million for small business and nonprofit loans under the Loan Relief Fund. The maximum principal loan balance per business or nonprofit is $50,000. The principal balance cannot exceed three months of cash operating expenses.
If a business or nonprofit is approved for a loan under the Loan Relief Fund, there is no interest payment for one year. An interest rate of two percent applies amortized over a three-year period thereafter. Principal payments can be deferred for up to one year.
Maryland allocated $50 million to the Grant Relief Fund for small businesses and nonprofits. Eligible businesses must have annual revenues of $5 million or less. The maximum grant balance is $10 million.
The Grant Relief Fund is intended to provide short term assistance as the business works with its bank or other financial partners to procure longer term financial assistance.
Businesses or nonprofits can apply online for the Loan Relief Fund or Grant Relief Fund at: https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-fund-programs.
Maryland also allocated $7 million to the Layoff Aversion Fund for small businesses and nonprofits. The Layoff Aversion Fund supports businesses undergoing economic stresses due to the pandemic by preventing or minimizing the duration of unemployment resulting from layoffs. This Fund will accept applications from now through 30 days after the end of the State of Emergency.
The maximum grant balance under the Layoff Aversion Fund is $50,000. The grant is to be used to purchase computers, printers, software and other home networking devices; or to enhance remote working. Grants also may be used by restaurants to pay for liability insurance that converts to delivery under emergency circumstances.
In addition, Maryland stated that if businesses paid the Maryland Sales & Use Taxes for March early, they may request a refund of their payment. Maryland also deferred its next business-related tax filing deadline to June 1, 2020.