In response to the COVID-19 pandemic, County Executive Angela Alsobrooks and the County Council agreed to the use of $10 Million EDI Funds to support Prince George’s County businesses that were adversely affected by the COVID-19 crisis. The EDI Fund provided the initial source of capital for the Prince George’s County COVID-19 Business Relief Fund (BRF). While there was an intent to raise additional funds from private sector lending institutions that has not occurred because many of those institutions committed to participate in the SBA Payroll Protection Plan (PPP).
The Prince George’s County Economic Development Corporation (EDC) and the Financial Services Corporation (FSC First) successfully launched the BRF on April 13, 2020. As of May 15, 2020, the BRF has issued commitments to 122 companies for more than $4,045,000 in Loans and $837,500 in Grants. Already, $2,110,000 has been wired to the respective borrowers. However, because of the severity of the pandemic on the regional and national economies, Prince George’s County businesses have applied for almost three times the BRF’s available $10 million.
As a result of the $158 Million federal CARES Act Grant to Prince George’s County, the County Executive intends to allocate $20 Million from the CARES Act Grant to fund the previously announced COVID19 Business Relief Fund (BRF). The County intends for the CARES Grant to reimburse the initial $10 Million EDI Fund allocation to the BRF. There are two critical changes: (1) The additional allocation gives us an opportunity to include sole proprietors, 1099 contractors and co-ops as eligible to apply; and (2) According to OMB, to be eligible for reimbursement the business relief assistance must be grants and cannot be in direct loans. That factor necessitates the following changes to both the initial awards from the BRF and to all future awards.
Previously Approved Applications:
a. In order to be reimbursable by the federal CARES Act Grant, all current BRF funded Loans must be converted to Forgivable Loans or Grants. The maximum assistance was originally $100,000 in loan funds and $10,000 in grant funds. Therefore, for previously approved applications, the maximum grant amount would now be $110,000 (although the typical BRF loan has been under $50,000, several Borrowers have received the maximum.). The Office of Law will process the necessary documentation for these changes.
b. Applicants who applied (and were approved) only for a $5,000 or $10,000 grant will be contacted and given the opportunity to revise their request considering the new provisions of the program going forward.
Newly Processed and Newly Submitted Applications:
a. Under the provisions of the $20 Million Allocation from the CARES Act Grant and the renamed Business Recovery Initiative (BRI) Guidelines, effective May 15, 2020 all commitments will be funded as Grants. In addition, the deadline for applications to the BRF is extended to 11:59 PM EST on May 29, 2020.
b. Grant award amounts will range from a $5,000 Minimum to a $100,000 Maximum.
c. Eligible applicants may include sole proprietors, 1099 contractors and co-ops.
d. All current and future BRI applicants will be required to submit:
COVID19 Business Recovery Initiative Online Application Form
2018 Tax Returns
2019 Tax Returns or Internally-prepared financial statements
2020 Interim Income Statement (January – March 2020)
Proof of an application to either the Maryland Department of Commerce’s COVID business relief programs or to the SBA’s COVID or EIDL programs.
e. The amount of Grant awards will be based upon financial statement analysis and needs assessment, regardless of the grant or loan amount that an applicant may have initially requested. Therefore, if a business has already applied, they will not have to re-apply.
f. Consistent with the prior review process, the amount of Grant awards to companies will be adjusted depending on the number of jobs affected and the justification of actual company losses caused by the COVID-19 crisis and the effects of various mandatory business closures or limitations on operations.
g. The Grant Agreement may contain the customary “public benefit requirements”.
EDC and FSC First will adjust their document review and evaluation process consistent with the changes noted above.
The modifications to the County’s COVID Business responses described in this letter will provide for a more streamlined eligibility and evaluation process and should result in funds being available to Prince George’s County companies through the BRI even more expeditiously. A communication strategy for these modifications is being finalized and will be implemented to provide all necessary information to both existing and prospective applicants.
Sincerely,
Shelly M. Gross-Wade
President and CEO
FSC First
David S. Iannucci
President and CEO
Economic Development Corporation
