Iowa Announces 'Stopgap' Relief For Small Businesses Disrupted By COVID-19
Iowa officials announced Monday the state is launching a short-term relief program for small businesses disrupted by measures taken to slow the spread of the new coronavirus.
Businesses with two to 25 employees prior to March 17 can apply for grants between $5,000 and $25,000. These businesses can also be eligible for a deferral of sales and use or withholding taxes.
Those with fewer than 50 employees may be eligible to delay their unemployment tax payments.
“This is a stopgap to basically keep doors open,” said Iowa Economic Development Authority Director Debbie Durham. “Because the first thing we’re dealing with is keeping as many people as employed as possible. Second is liquidity. And so this is a stopgap, very short period of time until the resources from the federal government begin to flow.”
The U.S. Small Business Administration is allowing Iowa businesses to apply for low-interest loans. But a federal coronavirus economic relief package was still help up in the U.S. Congress as of Monday evening.
Last week, Gov. Kim Reynolds ordered all restaurants and bars to close except for takeout and delivery. She has also ordered other types of businesses like gyms and salons to close to prevent the spread of COVID-19.
On Monday, Iowa Workforce Development Director Beth Townsend said the largest number of unemployment claims is coming from people who worked in hotels and restaurants.
Iowa’s new small business relief program has allocated $4 million for grants, but officials said that number could change in the future.
Half the money is coming from the Iowa Economic Development Authority, and the other half is coming from the state’s economic emergency fund. Before suspending the legislative session, lawmakers gave Reynolds permission to use up to about $20 million in emergency funds and gave her more transfer authority.
Reynolds the state’s actions can help businesses with cash flow until federal assistance arrives.
“I fully understand this doesn’t make up for having your businesses close for a period of time, or your customers staying home,” Reynolds said. “But it is our hope we can help businesses weather the storm, and as governor I want you to know that I’m committed to helping them do just that.”
The application for state assistance is expected to go live Tuesday morning, with a deadline to submit the completed application of March 31.