What to know about Montgomery’s $20M plan for emergency grants for small businesses, nonprofits

What to know about Montgomery’s $20M plan for emergency grants for small businesses, nonprofits

County executive answers questions about coronavirus relief measure

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Montgomery County Executive Marc Elrich answered questions about a proposed emergency grant program through a virtual conference on Wednesday. He is pictured at a press conference earlier this month.

By Briana Adhikusuma

As businesses and nonprofits furlough employees and struggle to stay open, Montgomery County leaders are working on a $20 million emergency grant program to help the community stay on its feet.

The proposed Public Health Emergency Grant Program would provide grants of up to $75,000 apiece to small businesses and nonprofits. These would cover employee wages and benefits, taxes, debt, rent, or other operating expenses.

An additional $5 million is included for individuals who need assistance with food, rent and other needs, for a total of $25 million.

Mini grants of up to $2,500 will be given to for-profit and nonprofit businesses to reimburse technology costs associated with employee teleworking during the public health emergency.

The County Council on Tuesday discussed the expedited bill to establish the program. A public hearing and vote on the legislation is scheduled for Tuesday at 1:30 p.m.

County Executive Marc Elrich and his staff have worked closely with the council on pulling together emergency relief funds.

Elrich answered questions about the emergency funds through a virtual conference call with small business owners and nonprofits on Wednesday morning. Elrich said that more than 500 people were logged on at one point.

“Once the virus is over, we’re likely to have an economic crisis that outruns the virus,” Elrich said. “In talking to a number of small businesses, it’s very clear that there are people who won’t reopen their doors unless they have some level of certainty of what that environment is going to be like.”

Here’s what to know about the emergency relief program and other helpful information:

1. Who is eligible to receive a grant?

Small businesses and nonprofits with up to 100 employees.

2. What will be required for the application?

City officials are working on getting the regulatory framework together and the details of the program. In order to receive a grant, business owners and nonprofit must be able to demonstrate their financial losses.

3. Will self-employed people be able to receive relief?

Elrich said the county will look at self-employers and hopes the state is looking into it, as well. He hopes to receive guidance from the state on how it’s treating self-employment for unemployment benefits, and expects to figure out how the county will deal with it, as well.

Sole proprietorships are being considered, too, as the regulations are formed. There is currently no minimum number of employees needed to get a grant.

4. How do employers know if employees are eligible for unemployment benefits?

Elrich referred business owners to the Maryland Department of Labor , Licensing and Regulation for specific questions regarding eligibility.

He strongly urged employers to encourage furloughed employees to sign up for unemployment benefits and said the emergency funds were not intended to replace those benefits.

“We’ve got to coordinate our programs with other programs and we’re going to direct people to all sources of help, so that we’re not the sole source of help,” Elrich said. “The county can’t possibly be the sole source of help based on the revenues we have available. We need to make sure our programs are supplemental, additional, and, in some cases, fill gaps that other people aren’t able to fill.”

The state is also looking at unemployment benefits for employees who had their hours cut or are now working part-time, Elrich said. Employees are eligible back to the day they no longer had work.

Elrich also said the state has no waiting period to become eligible and has waived any requirement that a person has to look for jobs and submit proof of the search before becoming eligible.

“The state has really liberalized how they’re going to treat unemployment and your employees should be able to get unemployment right away,” he said.

5. Will faith-based organizations, such as churches, qualify for the grants?

Elrich said he assumed they would fall under the category of nonprofits and be eligible. It would depend on how the regulations are written, he said.

“I think everybody is going to keep that in mind because a lot of the faith-based services provide needed services out to the community and I’d hate to lose the work that people are doing over this,” he said.

6. Will the public have access to the bill before it is voted on?

Yes, the bill can be accessed on the county’s website here.

7. Will 501(c)(6) nonprofits be eligible? These include chambers of commerce and business associations.

Elrich said he didn’t know whether these nonprofits would be eligible. If staff member are laid off, they are eligible for unemployment.

Jerome Fletcher, an assistant chief administrative officer for the county executive, was also on the conference call and said types of eligible nonprofits are not currently broken down in the bill. The council will likely work on that, he said.

“The key there is being able to demonstrate a loss,” he said. “Once you have that, then you are eligible for up to a certain number, but it’s based on what you can demonstrate.”

8. How much would businesses or nonprofit expect to receive in a grant?

The details of the program are still being formed but each business or nonprofit that employs up to 100 employees, is eligible for up to $75,000.

Fletcher said the county staff has discussed potentially creating tiers. As an example, businesses could be separated into tiers based on the number of their employees and receive a fund amount designated for that tier.

9. When will grant applications open? How long will businesses have to apply?

Fletcher said the staff has a “high sense of urgency,” but the timeline is still to be determined.

“It will do us no good if it takes us two, three, four weeks to get our program up and running and cash out the door,” he said. “Then we’ve missed the mark and people will still be suffering during that time period. Our goal is as quickly as possible.”

Elrich added that the staff will work to make the process as “uncomplicated” as possible.

10. For longstanding organizations and businesses, could eligibility criteria be based on tenure and track record rather than specific expenses, since expenses might be difficult to predict during the crisis?

“I don’t know how one lets tenure and [a track record] trump whether or not someone had to close their doors or pay their rent,” Elrich said. “I think expenses are expenses and that’s what we’re focusing on is trying to help people with expenses.”

Fletcher said tenure does not come into play with the grants, since the funds are intended to go to those with demonstrated financial losses.

11. What about tax deadline extensions?

Elrich said the county is looking at extensions “flexibly” and that the collection of personal property taxes and hotel-motel taxes is going to be put off. He did not say how long.

12. Will there be relief for property owners who can’t collect rent?

Elrich said it was an issue that would need to be addressed.

“It’s just going to be at such a scale that there’s just going to have to be a timeout. It’s hard to — I don’t blame the property owners because they have mortgages to pay. I’ll just be blunt about this. The banks have to be part of all the people taking ‘haircuts.’ … It can’t be that everybody takes a haircut, but at the end of the day the banks are standing there and saying, ‘I want all of my loan money. I want all of my mortgage money. I want everything.’”

Elrich said the state and federal governments will need to enforce that since the local jurisdictions don’t have the power to do it.

13. Will the grant program provide direct assistance to undocumented immigrants who are losing jobs but don’t qualify for federal assistance?

Elrich said he asked the state about immigrant eligibility for unemployment benefits, but has not received a response yet.

The $5 million set aside for individuals in the program could be used for immigrant families who need help as a result of losing jobs, he said.

14. Will the county provide support to businesses in accessing personal protective equipment and sanitizing supplies?

Elrich said the county is bringing in cleaning supplies, but does not have surpluses of them at this point. Both the county government and hospitals are struggling to get enough supplies, he said.

“We are doing what we can, but I don’t think we’re going to become a general supplier until we’re sure that we address the county’s needs and we’re able to address the needs of the health care workers, because that’s our first line of defense,” he said.

15. Will businesses owned by immigrants be eligible for the grants?

Yes, they will be treated like any other business, Elrich said. Council members have also prioritized asking only pertinent questions on the application.

16. Will businesses be required to open after the crisis if they receive grant funding from the program?

Elrich said he can’t force anybody to open, but the purpose of the program is to help businesses stay open or be in a position to open once the health crisis is over. He said if businesses already don’t intend to reopen, he would prefer to focus on businesses that are able to reopen.

17. Will organizations approved for a community grant to begin on July 1 still be included in the budget for the next fiscal year?

Elrich said he believes the county will prioritize the community grants.

18. How do businesses submit ideas or suggestions for how to help define the program? Where can questions be submitted?

Suggestions and questions can be sent to bizinfocovid19@montgomerycountymd.gov.

Briana Adhikusuma can be reached at briana.adhikusuma@bethesdamagazine.com.

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