MONTPELIER — The State Commerce and Community Development Agency and the Vermont Economic Development Authority have launched a short-term forgivable loan program designed to support Vermont businesses that experience ongoing working capital shortfalls. due to the pandemic.
“Supporting businesses in all regions of the state to recover and rebuild remains a top priority of my administration, and that is why we have worked to secure this funding from the Legislature,” Gov. Phil Scott said in a statement. . “This will help businesses disproportionately affected by the pandemic to stay in business, preserve jobs and strengthen the economy.”
Law 183 earmarked $19 million of Vermont’s American Rescue Plan Act allocation to provide financial assistance to eligible businesses, including sole proprietors and nonprofits, that continue to suffer damages economic due to the pandemic, up to $350,000 per applicant. To be eligible, applicants must demonstrate a reduction in adjusted net operating income of at least 22.5% in 2020 and 2021 compared to 2019, including any funding from prior programs that was not sufficient to meet to current economic challenges.
The program is designed to ensure loans will be forgiven if the proceeds are used to pay eligible operating expenses. There are no restrictions on how the funds should be spent, only that the money should be used for operating costs and not for capital investments. Borrowers who use the loan to pay for operating expenses such as payroll, mortgage interest, rent and utilities will have 12 months to apply for full forgiveness.
Priority will be given to applicants from the hardest-hit sectors, including travel and tourism, catering, accommodation, childcare and agriculture. Applications from Black, Indigenous and People of Color-owned businesses across all industry sectors will also be prioritized. Non-priority industrial sectors will be allowed to apply after the end of the priority period.
Companies working in the arts, culture, and creative economy sectors may be eligible for a Creative Futures grant and should visit the Vermont Arts Council webpage for more information.
“The health of Vermont’s economy depends on the health of the small business community, and the intent of this program is to help businesses with their cash flow needs get back on a stable footing so they can thrive beyond the pandemic,” the VEDA chief said. General Manager Cassie Polhemus. “VEDA’s expertise in financing small businesses, combined with our previous work administering similar programs such as the SBA’s Paycheck Protection Program (PPP), positions us well to help these businesses access this money so they can continue to provide the goods and services that are vital to us as consumers and to fuel Vermont’s economy.
Requests are processed on a first-come, first-served basis. Applicants are encouraged to seek technical assistance to help them determine their eligibility before applying. Technical support is available through the Vermont Small Business Development Center, which can be contacted directly for assistance.
The Short Term Reimbursable Loan Program application, instructions, tools and technical assistance information are available on the VEDA website, veda.org.