Key Takeaways:
- The New York State Small Business Recovery Grant was created in 2021 to help businesses cover expenses during the pandemic
- The program ended on Sept. 30, 2022, and the grant equaled $5,000, $10,000, or 10% of gross receipts, up to $50,000, depending on the business’s annual revenue
- Eligible businesses could use grant funds to cover pandemic-related costs, including payroll, personal protective equipment, rent, utilities, and more
- There are no plans for this grant to reopen, but understanding the terms and process will help you prepare if similar programs arise in the future
- Here are seven frequently asked questions about this grant that we answer in this post:
- How did businesses apply?
- How much funding could applicants get?
- What expenses can the grant funds cover?
- When must costs have been incurred?
- What requirements did applicants need to meet?
- Can I still apply?
- Will this grant program open again?
- Other small business relief programs to consider include:
- NYS Seed Funding Grant
- COVID-19 Capital Costs Tax Credit Program
- Restaurant Revitalization Fund
- Tourism Return-to-Work Grant Program
- Employee Retention Credit (ERC)
The New York State (NYS) Small Business Recovery Grant was designed to provide financial assistance to small businesses that were negatively impacted by the COVID-19 pandemic. The program was launched in June of 2021 and provided grants of up to $50,000 to eligible small businesses.
Businesses had to meet certain criteria to be eligible, such as being in New York state, experiencing a loss of revenue due to the pandemic, and demonstrating financial need. (More details about eligibility criteria are provided below.) The funds could be used for a variety of purposes including rent or mortgage payments, payroll expenses, utilities, and other operating costs.
There are three levels of funding for businesses based on their gross receipts in 2019. Some businesses received $5,000, some $10,000, and some 10% of their gross receipts, with a cap at $50,000 in total.
Many small businesses across New York were forced to close their doors temporarily or permanently due to the economic impact of COVID-19. This grant program was intended to help small businesses that were struggling due to the pandemic and provide them with much-needed financial support. The NYS Small Business Recovery Grant helped many of these businesses stay afloat so they could continue serving their communities during these challenging times.
Changes to the NYS Small Business Recovery Grant Program in August 2021
The NYS Small Business Recovery Grant Program was initiated in June 2021 and first prioritized small and micro businesses in New York, in addition to for-profit independent arts and cultural organizations. The program initially awarded over $48 million to more than 2,380 small businesses in the state. Businesses had to have revenues of less than $500,000 in 2019 to qualify.
In August 2021, the New York governor announced changes to this program, for which $800 million was set aside by the state. The changes allowed more small businesses to apply to get funding. Any business that saw revenues up to $2.5 million in 2019 could then apply, which was a significant boost from the prior $500,000 limit.
Another change was that, previously, businesses that got a Paycheck Protection Program (PPP) loan had a limit of $100,000 for the loan to apply for the state grant. The 2021 change raised this limit to $250,000.
The program ended on Sept. 30, 2022, because all funds were depleted. The state reported that it paid over $639 million to more than 35,000 small businesses since the program launched, and 90% of funds were sent to businesses owned by minorities or women.
The state is no longer accepting applications for this grant. It’s still helpful to understand how this program worked, however, since similar programs may arise in the future. We will next cover how businesses were eligible for the New York grant.
Qualifications for the NYS Small Business Recovery Grant
Many types of businesses were eligible to apply for the NYS Small Business Recovery Grant Program until it ended in 2022. Here is a list of qualifications they had to meet to apply and receive grant funds:
Operation Start Date
Businesses had to have been in operation on or before March 1, 2019, and they must have been in operation at the time they applied for the grant. Businesses that were closed because of government orders related to COVID-19 could still apply.
Loss of Gross Receipts
Businesses originally had to show they lost at least 25% in annual gross receipts for 2020, when compared to their gross receipts in 2019. They could also show other economic hardship that was directly related to COVID-19, like challenges complying with protocols or interrupted operations.
Annual Gross Receipts Limit
Businesses initially had to have gross receipts under $500,000 to qualify, but that was later raised to between $25,000 and $2.5 million for 2019 or 2020.
No Taxes Owed
Not owing taxes was another important stipulation for eligibility. Businesses couldn’t have owed federal, state, or local taxes before July 15, 2020, to qualify for the NYS business recovery grant.
Ineligible Businesses
Some types of businesses weren’t eligible. Nonprofits, political organizations, lobbying businesses, and churches were ineligible for this grant program. Landlords and passive real estate income businesses and illegal businesses also didn’t qualify.
Other Grant Recipients
Businesses that received PPP loans of $250,000 or less could qualify for the NYS grant, as well as those that received the Shuttered Venue Operator Grants of $150,000 or less. Businesses could also have received a COVID-19 EIDL Advance Grant of $10,000 or less and a COVID-19 EIDL Supplemental Targeted Advance Grant of $5,000 or less. Organizations that got a Restaurant Revitalization Fund grant were ineligible for this grant program.
This grant program proved very significant to many organizations in New York. Millions of dollars were paid out, helping businesses cover a range of expenses to get them through the toughest times of the COVID-19 pandemic.
Seven FAQs About the NYS Small Business Recovery Grant
This large grant program has ended, but many New York business owners are still curious about the terms, whether they received a grant or are preparing for another program in the future. Here are a few frequently asked questions about the NYS Small Business Recovery Grant Program.
1. How Did Businesses Apply for the NYS Small Business Recovery Grant?
The State of New York recommended using Google Chrome for the online application. All required documents needed to be submitted electronically in PDF format, and applicants needed a valid email address. Applicants provided their personal and business information, the amount of grant they were requesting, gross receipt information, the number of employees, the type of business and who it serves, and other details. Applicants could then check the status of their application after they submitted in the online portal.
2. How Much Funding Could Applicants Get?
There are three levels for this program regarding funding:
- Businesses with 2019 gross receipts between $25,000 and $49,999 could receive $5,000
- Businesses with 2019 gross receipts between $50,000 and $99,999 could receive $10,000
- Businesses with 2019 gross receipts between $100,000 and $500,000 could receive 10% of annual gross receipts, up to $50,000
3. What Expenses Can the Grant Funds Cover?
The NYS recovery grant can be used for quite a few business expenses related to pandemic losses. Examples include materials purchased to comply with COVID-19 protocols, payroll costs, utility costs, rent or a mortgage, insurance, HVAC costs, or personal protective equipment, among others.
4. When Must Costs Have Been Incurred?
Any qualifying expenses have to have been made between March 1, 2020, and April 1, 2021, for you to be able to use grant funds to cover them. Costs outside this period made potential applicants ineligible for the program.
5. What Requirements Did Applicants Need to Meet?
You first needed to ensure you had proof that you had at least 25% in losses between your tax returns. This meant gathering applicable tax returns and other tax information. Applicants additionally needed to provide proof that their business is located in New York state. They also provided information about stakeholders who own more than 20%, including their tax information.
6. Can I Still Apply for the NYS Small Business Recovery Grant?
This NYS recovery grant program ended on Sept. 30, 2022, so businesses couldn’t apply after that date, even if they were qualified. The funds approved for the program were used up.
7. Will the NYS Small Business Recovery Grant Open Again?
There are currently no plans for this particular program to open up applications again. It’s a good idea to review the eligibility requirements, however, in case a similar program opens in the future.
Make sure you stay up to date on pandemic legislation and new business relief programs. Both state and federal programs are still being introduced to help businesses get through tough economic times. Talk to an expert about your relief program and tax credit options when you’re not sure.
Other COVID-19 Relief Programs for Small Businesses
The good news is that you still have options, even though the NYS Small Business Recovery Grant Program is technically closed. Let’s walk through a few additional programs to take a look at when you’re seeking COVID-19 relief funding for your business:
- NYS Seed Funding Grant: This program provides $200 million to startups and micro businesses. Applications are currently closed because of demand, but they may open again.
- COVID-19 Capital Costs Tax Credit Program: This is a $250 million program that provides tax credits to small businesses in New York. You may be able to get a 50% tax credit of qualifying costs, up to $25,000.
- Restaurant Revitalization Fund: This program provides relief for restaurants, bars, and similar businesses that were impacted by the pandemic. Funding is equal to the business’s losses related to the pandemic, up to $10 million per business. Funds don’t have to be repaid as long as they’re used for eligible expenses before March 11, 2023.
- Tourism Return-to-Work Grant Program: This program helps tourism-industry businesses stay afloat during the pandemic by helping them increase their employment. These grants give businesses $5,000 for each new full-time job added and $2,500 for each new part-time job.
- Employee Retention Credit (ERC): The ERC is a huge tax credit opportunity that most businesses qualify for. You may be able to get up to $26,000 per employee if you lost gross receipts or had to close because of the pandemic.
Check out all the available New York State funding programs that aim to help businesses through the pandemic. There may be both federal and state programs that your business will qualify for.
Contact ERC Today With Questions About Tax Relief Programs
Your business may still be struggling to recover from the effects of COVID-19. Relief programs like the NYS Small Business Recovery Grant and the ERC were created to help with business losses because of the pandemic. The ERC proved to be the largest stimulus program ever from the federal government, and you can apply for this credit today.
You still have time to claim your ERC if you qualify for quarters in 2020 or 2021. You had to have lost at least 50% of gross receipts in 2020 and 20% of gross receipts in 2021, when compared to the same quarter in 2019. You can also qualify if you had to close your business partially or fully during a qualifying period in 2020 or 2021 because of a government order. You have three years from the date you originally filed the applicable tax return to submit Form 941-X to amend your return.
Learn more about the ERC by talking to a tax credit expert. The team at ERC Today is ready to help you understand if you qualify and submit your application. Contact ERC Today for more information about your Employee Retention Credit options.
