What is the New York State Small Business COVID-19 Pandemic Recovery Grant Program?
While COVID-19 is still an active threat to many small businesses through 2022, most pandemic economic recovery programs, like the Small Business Administration’s Paycheck Protection Program (PPP) loans and Economic Disaster Loans (EIDLs) of 2020 and 2021, have stopped accepting applicants. But New York State still has a program available to help struggling businesses recovering from the impacts of the COVID-19 pandemic: the New York Small Business Recovery Grant Program.
Launched in August 2021, this grant program was created for small businesses, micro-businesses, and independent for-profit arts and culture organizations in New York State. Its objective is to provide these companies with economic assistance in the event of difficulties related to the COVID-19 pandemic.
Unlike a PPP loan or other stimulus loan, these grants do not have to be repaid. But there are certain eligibility requirements that all applicants must meet to be considered for the grants.
New York Small Business Stimulus Grant Eligibility
First and foremost, to be eligible for a New York Small Business Recovery Grant, you must be a small business, microenterprise, or independent, for-profit arts or cultural organization that is resident, incorporated, licensed, or registered to do business. in New York State. To be considered eligible, your business had to be operational before March 1, 2019 and still in operation at the time of your application (although your business may be closed at the time of your application due to COVID-19 restrictions).
Other Eligibility Requirements for Grant Applications
Your business must also be “viable”, which means you can demonstrate that you had a positive net profit in 2019 based on your 2019 federal tax return. You must also demonstrate that you suffered economic hardship in due to the COVID-19 pandemic or health and safety protocols. In order to determine hardship, you will need to demonstrate a loss of gross revenue from 2019 to the pandemic.
The size of your business is also important in determining your eligibility. Small and micro businesses should be independently owned and operated and not dominant in their field. Small businesses must also employ 100 people or less while micro businesses are limited to 10 people or less.
Eligibility Criteria for Independent Arts or Culture Organizations
For an independent, for-profit arts or cultural organization, your business may be a small or medium-sized business such as a performance venue, promoter, production company, or any other entertainment-related business. You must also be independently operated and have 100 or fewer employees, not including seasonal hires.
How previous economic aid may affect eligibility
The amount and type of assistance you have received from past initiatives, including federal assistance, may affect your eligibility. For example, if you received a grant from the SBA Restaurant Revitalization Grant Program, you cannot apply for a New York Small Business Revitalization Grant. However, you can apply if you have received limited assistance from other programs. (See table below.)
|Type of support||Limit|
|Paycheck Protection Program Loan||$250,000 or less|
|EIDL COVID-19 Advance Grant||$10,000 or less|
|Additional Targeted Advance Grant COVID-19 EIDL||$5,000 or less|
|SBA Closed Site Operator Grant||Any|
Businesses Ineligible for New York Small Business Stimulus Grants
Certain types of businesses are not eligible for grants, including non-profit organizations, churches, or religious institutions. Government-owned businesses or entities, elected offices, and businesses engaged in lobbying or political activities are also not eligible. Landlords and passive real estate businesses cannot apply, nor can illegal businesses. Other types of businesses or industries may be considered ineligible as specified by Empire State Development (ESD).
You will need to ensure that you do not owe any federal, state or local taxes by July 15, 2020 (unless you have already agreed to a refund, deferral or other agreement with the relevant tax authorities). And you must be in “substantial compliance” with applicable local, state and federal laws, regulations, codes and requirements.
What You Need to Apply for a New York Small Business Recovery Grant
Eligible applicants will need to gather some specific documents in order to apply for the stimulus grant. Because you need to demonstrate a net positive on your 2019 business tax return and show that your gross receipts were affected by the pandemic, you need some specific information. First, you’ll need your 2019, 2020, and 2021 tax returns.
Next, you must be able to demonstrate that you had gross receipts in 2019 or 2020 between $25,000 and $2.5 million. You can find this information in the following places on your 2019 or 2020 federal income tax returns:
- Line 1a, IRS Form 1120 or 1065
- Line 1, Schedule of IRS Form 1040
- Sum of line 1a + line 2, IRS Form 1040 Schedule F
Next, you must be able to demonstrate that your business had a positive net income of at least $1 on your 2019 tax return. You can find this information at the following locations:
- Line 28, IRS Form 1120 (or line 21, IRS Form 1120S)
- Line 22, IRS Form 1065
- Line 31, IRS Form 1040 Schedule C
- Line 34, IRS Form 1040 Schedule F
Once you have this information, you can calculate your annual gross revenue loss year over year as of December 31, 2020 compared to the same period in 2019. You must be able to demonstrate that you have suffered a 25% loss between 2019 and 2020, but you must include any Pandemic Unemployment Assistance (PUA), Federal Unemployment Compensation and Lost Wage Assistance programs, which will be verified by the New York State Department of Labor (NYS). You will need to be able to show that your total expenses in 2020 for your small business are greater than the amount you would receive from the grant.
Eligible businesses will also need to provide at least two of the following documents to prove that your business is located in New York State and currently in operation:
- To rent
- utility bill
- Company bank or credit card statement
- Professional insurance invoice
- Payment processing report
- NYS ST-809 or ST-100 Sales Tax Collection Document
For proof of business organization, you will need to provide one of the following documents:
- Business license
- Company certificate
- Organization certificate
- Assumed Name Certificate or DBA
- NYS Authority Certificate
- Articles of incorporation
- Document issued by the municipality of NYS indicating authorization to work in NYS
You will need to provide your ownership schedule, unless you are a sole proprietor, and proof of your number of employees via your most recent NYS-45 document. You may be asked to provide IRS Form 4506-C.
Finally, to receive the grant, you will need to provide your IRS W-9 form and bank account information.
New York Small Business Recovery Program Grant Amounts
The amount of money you can receive for the grant depends on your annual gross receipts.
|Gross receipts||Grant amount|
|$25,000 to $49,999.99||$5,000|
|$50,000 to $99,999.99||$10,000|
|$100,000 to $2.5 million||10% of gross receipts (max $50,000)|
You also may not use grant funds for any unauthorized purpose, such as repayment or prepayment of a PPP loan. Eligible use of the fund includes anything related to your business, including payroll costs, rent or mortgage payments, property taxes, insurance, or utilities. You can also use the grant to cover costs related to following COVID-19 health and safety protocols, such as personal protective equipment (PPE).
Other Resources for Small Business Grants
ESD is clear that the amount of funding they have available for these grants is limited, so they are extremely selective about who receives funding. They say priority for grants will be given to owners of socially and economically disadvantaged businesses, such as those owned by people with disabilities or veteran-owned businesses. In addition, the industry and geographic location of your business may be considered in your application. So, if your company is in New York, you may not be selected due to the high number of other applicants.
If you are not eligible for this grant program or if you apply and are not selected, there are several other ways to get help for your business. Small business grants are like free money for your business because they don’t have to be repaid. Of course, a small business loan can help you build credit for your business and may not be as difficult to obtain as you think.
If you are a member of certain protected classes, you may be able to access other resources, such as grants for women-owned businesses and grants for veterans. At Nav, we also have a small business grant program where we award a winner of $10,000 and a runner up of $5,000. To apply for the Nav Small Business Grant, you’ll need to create a free Nav account, tell us what your business could do with $10,000, and then ask your clients, friends and family to vote for you. Winners are selected quarterly and receive a check that their company can use as they see fit.
For more information on the New York grant, visit nysmallbusinessrecovery.com.
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