(Note: This post was updated in the early afternoon of May 4 based on new guidance from the governor and AEDC.) Arkansas businesses that did not previously apply should get ready today to apply for Arkansas Ready for Business grants tomorrow or Wednesday, May 5-6. These are $1,000-per-employee grants that can be used for PPE, disinfection deep cleaning, and other health and safety equipment or services related to opening or operating a business during the coronavirus epidemic (see our prior post for details). Very small (50 employees and under) or women/minority-owned businesses should especially consider applying because of funding set-asides. While it appears that the Arkansas Economic Development Commission is no longer taking a first-come, first-served approach, out of caution businesses may wish to apply as soon at the application system opens tomorrow, May 5, at 8 a.m.
The first round of funding went very quickly on Wednesday, April 29. The program was announced in the early afternoon, and the application portal went live at 5 p.m. The guidance at that time indicated that applications were first-come first-served. Businesses applied for roughly $36 million within 60-80 minutes, until AEDC shut down the website. Only $15 million of funding was available at the time (although it seems that AEDC had not obtained the necessary legislative approval of the funding).
On Friday, May 1, Governor Hutchinson announced that he would seek an additional $85 million of funding for Arkansas Ready for Business. Over the weekend the legislature whittled it down to an additional $40 million of funding. The application window will open tomorrow and Wednesday, May 5 and 6, from 8 a.m. to 6 p.m. each day.
While not clear, the guidance today suggests that AEDC has walked away from a first-come first-served approach and is going to consider all applications from both windows (April 29 and May 5-6) together. As this document comparison shows, language about applications being "reviewed in the order in which they are received" has been deleted compared with the earlier guidance. However there has not been affirmative guidance about the new approach. What appears to be likely is that AEDC will use this application window to gauge the demand. Additional funding from the legislature may be possible if there is substantial demand in excess of available funding (as seems likely). If additional funding is not available, AEDC's criteria for allocating the grant monies is unclear; guidance hints at reductions to maximum per-company and per-employee grant amounts.
The legislature's appropriation has also resulted in additional conditions on what businesses are funded: that 75% of funding must go to very small businesses with 50 employees or less (an order of magnitude less than the 500 employee SBA PPP definition of a small business). In addition, at least 15% of recipients must be minority- and women-owned businesses (this appears to be a gross count and not a percent of funding). This means non-minority/women-owned, large and mid-size employers are eligible for 25% or less of available funds. This could prove to be a significant haircut on such employers, and particularly those who applied in the first round and expected a full award up to the $100,000 maximum.
May 5 and 6 will probably be the last window to apply for these grants. While it is likely that AEDC is no longer taking a first-come first-served approach, out of caution companies may still wish to apply as close to 8:00 a.m. tomorrow as possible. On the back-end of the window, there appears to be a hard stop to applications at 6:00 p.m. on both days, and so businesses should apply early so as to resolve any potential issues before application system closure.