On Thursday, May 14, the Mississippi Legislature approved Senate Bill 2772, which will provide $300 million in financial relief to Mississippi businesses forced to close during COVID-19. This bill results from the $1.25 billion in COVID-19 relief funds that the federal government authorized Mississippi to administer to small businesses facing financial hardship.
S.B. 2772 contains two important provisions that can provide direct relief to Mississippi small businesses.
Immediate Payment of $2,000 to Eligible Businesses
The bill allocates an immediate one-time payment of $2,000.00 for Mississippi businesses that meet the following criteria: the business (1) was registered with the Mississippi Department of Revenue and had an Employer Identification Number before March 1, 2020; (2) had one of the North American Industry Classification System (NAICS) codes listed below and was actively engaged in business activity before March 1, 2020; (3) was subject to any state, county, or municipal order that required business closure; (4) unless except, has filed state taxes for tax year 2018 or 2019 or intends to file for tax year 2020; (5) unless excepted, had no more than 50 full-time equivalent (“FTE”) employees as of March 1, 2020; and (6) is not a subsidiary of or owned by a business with more than 50 FTE employees.
Eligible NAICS codes include the following: 4421, 4422, 4481, 4482, 4483, 4511, 4512, 4531, 4532, 4533, 4539, 5121, 6116, 6244, 7111, 7112, 7131, 7139, 7225, or 8121. These codes cover many retail businesses, child daycare centers, restaurants, barbershops and beauty salons, to name a few. The funds will be administered and disbursed by the Mississippi Department of Finance and Administration (“DFA”).
“Back to Business Mississippi” Grant Program
The second significant portion of S.B. 2772 is called the “Back to Business Mississippi” Grant Program and provides grants to eligible businesses of between $1,500 and $25,000. A business must meet certain requirements to be deemed eligible for this grant including being in good standing with the Mississippi Secretary of State as of March 1, 2020, suffering a business interruption due to COVID-19, and having fewer than 50 FTEs, among others. The grant can cover eligible expenses including mortgage interest, rent, payroll, and other lawful business expenses that do not exceed a two-month period.
The Mississippi Development Authority (“MDA”) will administer and award grants to small businesses that qualify. For the first 21 days of the grant program, MDA will only review applications for businesses that (1) did not receive a Small Business Administration Paycheck Protection Program (“PPP”) loan or Economic Injury Disaster Loan (“EIDL”); (2) did not receive any other federal aid; and (3) did not receive compensation from any insurance company for business interruption. Additionally, MDA will reserve $40 million for grants for eligible minority-owned businesses for the first 60 days of the grant program.
The timing of the availability of these funds is especially important given the large number of small businesses that did not apply for or receive federal loans under the Paycheck Protection Program administered by the Small Business Administration. It is important for small businesses to start gathering financial documentation to complete the application process for either of these relief options.
We will provide additional details when the formal application process for the financial relief measures is published, and we will continue to answer questions and counsel small businesses on how to obtain these grants and navigate the application to expedite payments.
Please give us a call at 601-487-4550 if you have any questions.