NC Legislature Approves $ 125 Million To Help Small Businesses Through The Pandemic | Parker Poe Adams & Bernstein LLP
Over the weekend, North Carolina lawmakers passed a nearly $ 1.6 billion COVID-19 relief package that includes $ 125 million in small business funding. An earlier version of the bill in the House of Representatives set for $ 75 million for small businesses, but lawmakers ultimately opted for the larger amount of funding the Senate wanted.
Funds will be distributed through the Golden Long-term Economic Advancement Foundation (LEAF), a Rocky Mount-based economic development organization that has traditionally helped rural and tobacco-dependent communities in North Carolina. In late March, Golden LEAF launched an initial loan program to help small businesses bridge the pandemic. Within 48 hours of starting this program, Golden LEAF had distributed all of $ 15 million of funds with an alleged average loan size of $ 35,000.
With the new funding, the legislature has determined its intention to use “a fair share of the funds” to support historically underutilized small businesses. The bill further instructs lenders to prioritize loans for facilities:
- With 100 or fewer full-time equivalent employees as of March 10th.
- These are independently owned by a company with a physical presence in the state that may experience economic losses as a result of COVID-19.
Companies that qualify for the program can qualify for a loan of up to $ 50,000. Loan recipients must use the loan for “employee benefits, mortgages, rent, operating expenses, and other operating costs and expenses incurred on behalf of a company located in that state”.
The bill instructs Golden LEAF to ensure that all qualified businesses are aware of the program by working with the NC Small Business Center Network, the Office of Historically Underutilized Businesses within the Department of Administration, the NC Small Business and Technology Development Center, the North Carolina Institute cooperate in the economic development of minorities and other similar institutions.
Golden LEAF may also use grants of up to $ 2 million to provide technical assistance to companies applying for loans from this program or other state aid programs. Assuming Golden LEAF uses the full $ 2 million, that leaves $ 123 million for small business loans.
The non-partisan invoice Adopted unanimously, and Governor Roy Cooper is expected to sign it. Information on tax relief can be found in the legislative package here and a summary of other changes here.