Governor launches short-term forgivable loan program
Gov. Phil Scott, the Agency of Commerce and Community Development (ACCD), and the Vermont Economic Development Authority (VEDA) today announced the launch of the Short-Term Forgivable Loan Program designed to support Vermont businesses experiencing continued working capital shortfalls as a result of the pandemic.
“Supporting businesses in every region of the state to recover and rebuild remains a top priority of my administration, and that’s why we worked to secure this funding from the Legislature,” said Scott. “This will help those businesses disproportionately impacted by the pandemic remain in operation, preserve jobs, and strengthen the economy.”
S.11 (Act 183) appropriated $19 million of Vermont’s American Rescue Plan Act (ARPA) allocation to provide financial assistance to eligible businesses, including sole proprietors and not-for-profits, that continue to experience economic harm due to the pandemic, up to $350,000 per applicant. To be eligible, applicants must demonstrate a reduction in adjusted net operating income of at least 22.5% in 2020 and 2021 as compared to 2019, including any funding from prior programs that were not enough to weather the ongoing economic challenges.
The program is designed to ensure the loans will be forgiven if the proceeds are used to pay for eligible operating expenses. There are no restrictions to how the funds must be spent, only that the money be used for operating costs and not capital investments. Borrowers who use the loan to pay for operating expenses such as payroll, mortgage interest, rent, and utilities will have 12 months to apply for full forgiveness.
Priority will be given to applicants from the hardest hit sectors including travel and tourism, food service, lodging, childcare and agriculture. Applications from Black, Indigenous and People of Color (BIPOC) owned businesses in all industry sectors will also be prioritized. Non-priority industry sectors will be allowed to apply after the priority period ends.
Businesses working in the arts, culture, and creative economy sectors may be eligible for a Creative Futures Grant and should visit the Vermont Arts Council webpage for information.
“The health of Vermont’s economy is dependent on the health of the small business community and the intent of this program is to help businesses with their cash flow needs to get back on stable footing so they can thrive beyond the pandemic,” said VEDA’s Chief Executive Officer Cassie Polhemus. “VEDA’s expertise in small business financing combined with our previous work in administering similar programs such as the SBA Paycheck Protection Program (PPP) positions us well to help these businesses access this money so they can continue providing the goods and services that are vital to us as consumers and to fuel the Vermont economy.”
Applications are processed on a first come, first served basis. Applicants are highly encouraged to seek technical assistance for help determining eligibility prior to applying.
Technical assistance is available through the Vermont Small Business Development Center (VtSBDC) which may be contacted directly for assistance.
Businesses are encouraged to use the application checklist to start assembling the required supporting documentation, including tax returns and a profit and loss statement for the first six months of 2022, and the FLP calculator tool to determine eligibility and estimate loan amount prior to starting an application.
The FLP calculator tool can be found on the VEDA website: veda.org.