Over the weekend, the North Carolina legislature passed a nearly $1.6 billion COVID-19 relief package that includes $125 million in funding for small businesses. An earlier version of the bill in the House budgeted $75 million for small businesses, but the legislature ultimately settled on the higher funding amount the Senate wanted.
The funding will be distributed through the Golden Long-term Economic Advancement Foundation (LEAF), an economic development entity based in Rocky Mount that has traditionally helped North Carolina’s rural and tobacco-dependent communities. In late March, Golden LEAF launched an initial loan program to help small businesses bridge the pandemic. Within 48 hours of that program’s launch, Golden LEAF had dispersed all $15 million of the funds with a purported average loan size of $35,000.
With the new funding, lawmakers specified their intent “for an equitable portion of funds” to be used to assist historically underutilized small businesses. The bill goes on to instruct lenders “to prioritize loans” for establishments:
- With 100 or fewer full-time equivalent employees as of March 10.
- That are independently owned by a business with a physical presence in the state that is able to show economic losses as a result of COVID-19.
Businesses that meet the program’s eligibility requirements can qualify to receive a loan of up to $50,000. Loan recipients have to use the loan for “employee compensation, mortgage, rent, utilities, and other operating costs and expenses incurred on behalf of a business located in this State.”
The bill instructs Golden LEAF to ensure all qualifying businesses are aware of the program by working with the N.C. Small Business Center Network, the Office of Historically Underutilized Businesses within the Department of Administration, the N.C. Small Business and Technology Development Center, the North Carolina Institute of Minority Economic Development, and other similar entities.
Golden LEAF is also permitted to use up to $2 million in grants to provide technical assistance to businesses applying for loans from this program or other federal assistance programs. Assuming Golden LEAF uses the full $2 million, that will leave $123 million for small business loans.
The bipartisan bill passed unanimously, and Governor Roy Cooper is expected to sign it. You can find information about tax relief in the legislative package here and a summary of other changes here.
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