$15 Million Arkansas Ready for Business Grant Program Starts (and Finishes) Taking Applications Today

Update May 1, 2020: Governor Hutchinson announced plans to make an additional $85 million available, subject to legislative approval (which seems highly likely).  We cover the updated program in a subsequent post once details are available. 

Update: AEDC received over 2,000 applications in the first hour or so, which will use up all available funding.  AEDC is no longer accepting applications for these grants unless more funding is made available.

Today Governor Hutchinson announced a new $15 million grant program to be administered by the Arkansas Economic Development Commission to help businesses with costs associated with assuring the health and safety of employees and patrons during the coronavirus epidemic.  Applications begin today, April 29, at 5:00 p.m.  Given the pattern of coronavirus relief funding being used up quickly (think federal SBA PPP funding), interested businesses should apply as soon as possible.

Overview: The grants are for expenses between March 1 and December 31, 2020, where the expenses are "associated with ensuring the health and safety of employees and patrons."  AEDC has published a fact sheet about the program, and it will take applications from its website beginning at 5 p.m. today.  AEDC's news release says that it will review applications in the order in which they are received. In addition, the grants are discretionary and not all who apply will necessarily be approved, even if they meet the stated requirements for a grant. The grant will likely be governed by a grant agreement with AEDC, and it will likely provide for a clawback if the grant monies are not used for eligible expenses or if the grantee otherwise does not meet grant requirements.

Eligible Expenses: The grants are intended to encompass extra expenses incident to protecting health and safety of employees and customers while operating a business during the epidemic. Examples given are:

  • Personal Protective Equipment (PPE);
  • No-contact thermometers;
  • No-contact Point of Sale (POS) payment equipment;
  • Supplies and disinfectants to deep clean premises;
  • Third-party deep cleaning services;
  • Hand sanitizer stations;
  • Expenses associated with reconfiguring business to meet recommended health and safety guidelines; and
  • Signage, marketing, and other one-time expenses associated with reopening or resuming normal operations.

Similar expenses to these should also qualify.

Grant caps: Grants are capped based on the number of Arkansas W2 employees as of March 1, 2020.  The cap is $1,000 per full-time employee.  Full-time employees are based on working at least 30 hours per week; employees working part-time between 15 and 30 hours per week count as half. Owners who work at least 30 hours per week can also count as full-time employees, even if they do not receive W-2s. There is also a total cap of $100,000 per business. The grants are generally on a separate entity basis (as opposed to a corporate group); AEDC can exercise its discretion to limit overreaching by multiple entities within a corporate group.

Other requirements: The business entity must be in good standing with the Arkansas Secretary of State (or, if a sole proprietor, have a sales tax license or business license). The business and its owners cannot be delinquent on any Arkansas tax obligations. The business must involve physical interaction that necessitates the health and safety expenses: either employees or customers coming onto the business premises, or the business coming onto customer premises.

Public scrutiny: Arkansas has a strong FOIA law. Expect grant amounts and recipients to become public knowledge. Caution may also be exercised with respect to application materials.

Application document requirements: Before trying to apply online, a business should have at the ready: electronic copies of (1) the business representative's driver's license, (2) a signed W9, (3) a voided check, and (4) a certificate of good standing for the business entity (or a sales tax permit or business license for a sole proprietor).

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