Additional Grants Available for South Dakota Small Businesses Affected by COVID-19
The South Dakota State Legislature met yesterday in a special session and increased the state’s budget to include the $1.396 billion of additional federal aid received for COVID-19 support. During this session, Resolution 601 was passed which specifies how certain funds will be spent. This is good news for many small businesses in South Dakota, as $400,000,000 of the relief funds are available to be issued as grants to small businesses. You can find the bill here:
In order to be eligible to apply for a grant, businesses must meet the following requirements:
- Be located in South Dakota
- Have had a reduction in business of at least 25% (defined below)
- Not have gross revenues exceeding $38.5 million
- Certify to a going concern statement
The requirement for a 25% reduction in business is calculated by comparing net cash flows from operations during March through August of 2019 to those from March through August of 2020. Cash flow is defined as cash revenues minus cash expenses, less payments on term debt. The calculation does not include depreciation, amortization, or other noncash expenses. Also, federal aid such as PPP funds or other COVID related grants received in 2020 must be included as revenues in the calculation.
Grants will be available up $100,000 per qualifying business and may not be awarded if calculated at less than $750. The application period is expected to open on October 12, 2020 and close on October 23, 2020. This gives businesses just 12 days to submit their applications. Once the application window closes, grants will be awarded based on a pro-rata share of the available funds. The grants are required to be disbursed by December 30, 2020.
Resolution 601 also includes $40,000,000 of grants earmarked for small nonprofit businesses, $10,000,000 for small business start-ups, and $115,000,000 for community-based health care providers. A small business start-up is one that first registered with the State of SD between September 1, 2019 and June 1, 2020. A health care provider must show a reduction in net cash flows, but there is no 25% threshold.
We expect the grant applications to be available in the next few days at: https://covid.sd.gov/
The knowledgeable staff at Ketel Thorstenson, LLP is here to help you with the calculations required and can assist you with submitting your application for COVID-19 related grant funds. Please contact us today at 605-342-5630.