South Dakota small business will soon be able to apply for grants to help mitigate the impact of COVID-19. The federal Coronavirus Relief Funds are coming down through the States, and the South Dakota Legislature is set to meet on October 5 for a special session.
Details are still being finalized about this South Dakota Small Business Grants program, but here's what we know at this time:
To be eligible, a business must be located in South Dakota and must have had at least $50,000 in gross revenue in 2019. Additionally, the business must be able to show a "reduction in business" (defined below) of at least 25%.
To define this "reduction in business," they will look at 2019 net vs. 2020 net for the period of March, April, and May. Specifically:
"2019 net" is gross revenue minus gross expenses for March-April-May 2019
"2020 net" is gross revenue minus gross expenses for March-April-May 2020
The formula will also take into account any federal aid received, such as Paycheck Protection Program (PPP) funds or other federal COVID relief funding received by the business in 2020.
So the final formula to define "reduction in business" will be:
2020 Net minus 2019 Net plus Federal Aid
Here's an example:
In March-April-May 2019, "Example Company" had $1,000,000 in gross revenue and $750,000 in gross expenses. 2019 net was $250,000.
In March-April May 2020, "Example Company" had $750,000 in gross revenue and $650,000 in gross expenses. 2020 net was $100,000.
"Example Company" also accepted $50,000 in federal PPP loans.
$100,000 (2020 net) - $250,000 (2019 net) + $50,000 (federal loan) = -$100,000 reduction in business
-$100,000 reduction in business / $250,000 (2019 net) = -40% loss
Applications are proposed to open October 12 and close on October 23. It would be a good idea to begin gathering your paperwork now so you can fill out the forms quickly when they become available.
Once all applications are received, grant awards will be based on a pro-rate share of available funds. For example, if there are $2 billion in eligible "reductions in business" and $200 million in available grant funds, grants will be at a 10% rate of your "reduction in business." If additional federal funds become available, additional allocations will be considered.
I will work to keep this website updated as any more details become available! Let me know if I can help in any way.