Rebuild VA Small Business Grant Fund: What You Need to Know

By Terry Barrett, CPA, Senior Tax Manager | State and Local Tax Team

New Small Business Grant Program for Small Businesses and Nonprofits

Governor Northam announced on Monday, July 27, 2020, a grant program, the Rebuild VA Small Business Grant Fund, designed to assist small businesses and nonprofits disrupted by the COVID-19 pandemic who meet very specific program criteria. The grants may be up to $10,000 and available for about 7,000 applicants. Funding for the grant program comes from the federal CARES (Coronavirus Aid, Relief, and Economic Security) Act received by Virginia and is approximately $70 million.

*The status of the grant may change as time passes, please reference https://www.rebuildva.org/ for the most current information.

What you Need to Know About the Rebuild VA Grant Fund

The grants are designed to assist businesses that were required to close due to state mandates intended to stop or slow the spread of the virus as well as those who have not received any federal, state, regional or local agency/authority funding, including any CARES Act funding such as the Payroll Protection Program, or Economic Injury Disaster Loans.

One half of the program funds will be distributed to eligible businesses and nonprofits operating in low-income and economically disadvantaged areas of the state.

Who is eligible for the grant?

To qualify for the grant, businesses and nonprofits must meet the following criteria:

• Organized as one of the following:
  • C corporation, pass through entity, or other legal entity that is organized separate from the owner;
  • A 501(c)(3) organization or 501(c)(19) veterans organization;
  • A sole proprietor; or
  • An independent contractor.
• Fall within one of the following categories (learn more about who qualifies for the Rebuild VA Small Business Fund):
  • Restaurant and Beverage Services
  • “Bricks and Mortar” Retail stores that were considered “nonessential” and subject to the state-mandated COVID closure requirements
  • Fitness and Exercise Facilities
  • Personal Care and Personal Grooming Services
  • Entertainment and Public Amusements
  • Private Campgrounds and Overnight Summer Camps
• Meet the following additional criteria:
  • Annual gross revenues of less than $1.5 million
  • No more than 25 employees
  • Operational prior to March 12, 2020
  • In good standing with the State Corporation Commission
  • Principal place of business in Virginia
  • Engage in legal activities
  • NOT received CARES Act funding from ANY federal, state, regional or local agency or authority (including any Payroll Protection Program (PPP), Economic Injury Disaster Loan or any other federal funding related to the pandemic relief)

Who is Not Eligible for the Grant?

Applicants meeting the above criteria but also meeting any of the following criteria are not eligible for the grants:

• Not individually owned and operated
• Delinquent on Virginia state income taxes and do not have a payment plan in place
• Lobbyists
• If the applicant, owner, or a principal of the business who has 20 percent or greater ownership interest is more than 60 days delinquent on child support obligations

What are the Grants for?

Grants may only be used to cover expenses incurred for the following purposes:

• Payroll support, including paid sick, medical, or family leave, and costs related to the continuation of group health care benefits during periods of leave;
• Employee salaries;
• Mortgage payments, rent, and utilities;
• Principal and interest payments for any business loans from banks, savings and loan institutions, or credit unions, that were incurred before or during the emergency;
• Eligible personal protective equipment, cleaning and disinfecting materials; or
• Other working capital needed to address COVID-19 response.

Eligible small businesses and nonprofits may receive up to three times their average monthly eligible expenses for a maximum of $10,000.

How to Apply?

Applications will be available beginning August 10, 2020, and may be submitted online or printed and mailed. Additional information regarding the program, application portal, qualifying applicants and registration for “How to Apply” webinars hosted by the state’s Department of Small Business and Supplier Diversity (SBSD) may be found here.

If you have questions about the Rebuild VA Small Business Fund grant program, please reach out to your Keiter advisor. We can help. Email | 804.747.0000

Additional Resources:

Short Term Rentals: New Virginia Local Requirements and Tax Considerations

City of Richmond and Surrounding Localities Provide Tax Amnesty Programs in Response to COVID-19

COVID-19 Business Tax Relief at the State Level