Connecticut Governor Ned Lamont recently announced the CT CARES Small Business Grant Program (“CTC”). Through the Connecticut Department of Economic and Community Development (“DECD”), the CTC will provide $50 million in grants to help small businesses in Connecticut recover from the ongoing financial challenges brought about by COVID-19. The grants will be administered and dispersed by a private entity called SoFi. Eligible businesses (including certain tax exempt organizations) can receive a one-time $5,000 grant to be paid to approved applicants on or before December 30, 2020. The online application for the program is not yet available, but it is anticipated that it will be available the week of November 9th. Below I will summarize the details of the CTC as provided by the DECD to date. This should all be considered subject to change until the actual application is available.
- An eligible business must have no more than 20 full time employees (“FTE”) in Connecticut during 2019 OR the business must have less than $1.5 million in 2019 annualized payroll. The calculation of FTEs and payroll must include affiliated companies. (presumably additional details on what an FTE and an affiliated business are will be provided by the DECD at a later date).
- An eligible business must be able to demonstrate that revenues for the period beginning January 1, 2020 and ending September 30, 2020 are down 20% or more as compared to the period beginning January 1, 2019 and ending September 30, 2019.
- An eligible business must have been established by October 1, 2019 and still be active. The Connecticut Department of Revenue Services (“DRS”) will verify that businesses meet this establishment test. (It is unclear from the DECD published guidance to date how businesses established on or shortly before October 1, 2019 will compute the 20% reduction in revenue test above).
- An eligible business must be in good standing with the DRS or current with a payment plan through December 31, 2019.
- An eligible business may be a business run from someone’s home and/or a sole proprietorship.
- An eligible business may also be a legal entity or an entity exempt from income tax pursuant to IRC sections 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7), or 501(c)(19).
- An eligible business must (i) remain a viable business, (ii) be planning to reopen if closed, (iii) be planning to rehire any workers let go due to COVID as business conditions recover, and (iv) have a material financial need that cannot be overcome without the grant of emergency relief funds.
- A business that received federal CARES Act, PPP or EIDL assistance is eligible for a CTC grant, but the grant cannot be used for the same expenses incurred or expected to occur between March 1, 2020 through December 30, 2020.
CTC Grants may be used for
- Payroll expenses
- Rent or mortgage expenses
- Utilities expenses
- Purchases of inventory
- Purchases of machinery and/or equipment
- Cost associated to ensure compliance with CT Reopen Business Sector Rules
Businesses in which the majority of revenue is earned from the following activities are not eligible for a CTC grant:
- medical marijuana;
- liquor stores and alcohol distributors;
- adult businesses such as strip clubs;
- vape retailers;
- tobacco shops and smoking lounges;
- businesses having to do with gambling;
- gun stores and ranges;
- cash advance,
- check cashing businesses,
- pawn shops;
- bail bonds businesses;
- collection agencies or services;
- and auction, bankruptcy, fire or “lost-our-lease”, “going-out-of-business” or similar sales businesses.
A business establishment is excluded if that business is (a) 50% or more owned by another business and (b) the total FTE count exceeds 500 at the group of businesses with 50% or more common ownership. For example, if a restaurant named Becky’s is 50% owned by a larger company called Sally’s and Sally’s owns 50% of many other restaurants and the total number of FTEs at all of Sally’s restaurants is 700 then Becky’s will not be eligible for a CTC grant.
Distribution of grants
- $25 million to eligible businesses in distressed municipalities
- $25 million to eligible businesses located outside of distressed municipalities
- Businesses with multiple locations are only allowed one CTC grant
- All funds will be disbursed to approved applicants by December 30, 2020
The DECD has also published a FAQ. Interested parties should regularly check the DECD website regularly for updates.
Please contact me at email@example.com or 860-767-7893 if you have any questions or need assistance in applying for a CTC grant.