If Jordan receives federal relief funds, the money will go toward a newly created small business relief program, the city council decided last week.
The Coronavirus Aid, Relief and Economic Security Act, which passes federal money onto states to cover coronavirus-related expenses, was signed into law in March. Nationwide, CARES spending included individual stimulus checks, a significant boost to unemployment programs, corporate aid, small business loans and $339.8 billion to state and local governments.
Since funds allocated to local government cannot be used to cover lost municipal revenues, some cities have considered passing the funds onto local businesses that continue to struggle under COVID-19 restrictions.
“The State of Minnesota has indicated that CARES Act funds can be used to create small business relief programs,” City Administrator Tom Nikunen write in a council memo. “The state has not issued any final guidance or made a decision if this is an eligible use of the funds. Cities and counties are setting up these programs in anticipation that this is a possible use if the program has been previously approved.”
The Jordan City Council voted unanimously July 6 to pass a resolution establishing an emergency small business relief program that will provide provide one-time forgivable loans of up to $15,000 to small businesses that have not received PPP loans. Funds can be used for operating expenses, including rent or mortgage payments, utilities, payments to suppliers or other critical non-payroll business expenses.
Eligible businesses must be locally owned and operated, employ fewer than 20 people and have existed for at least one year prior to March 1, 2020. Applicants must also demonstrate a significant loss in revenue since March 15.
The city will begin accepting applications once CARES Act authorization is approved and is required to contribute a minimum of 20% in matching funds to establish the program. Matching funds would come from the Economic Development Authority fund, which has a balance of about $265,000. Jordan may receive up to $463,719 in CARES Act dollars.