Sure, given that this economic pandemic is totally Government created, Gov. Sununu has been whipping his Main Street Relief Fund to help small business. GraniteGrok is a small business, sorta – we have some revenues (donations and some sponsored posts) but not even to the level of 5 digits. It pays the bills and helps replacing older equipment – there is no payroll as we’re all volunteers. That all said, we “get stuff” and a loyal reader asked that I look into this. The complaint was that while this is being really hyped as helping NH’s small businesses above and beyond any of the Federal programs. Well, when you look at the formula, it is clear that any Federal program is considered first and foremost:
To determine the grant amount for an eligible business as part of the Main Street Relief Fund program utilize the below Grant Formula:
Step 1. Calculate the business’s anticipated gross loss, by subtracting estimated 2020 gross receipts from actual 2019 gross receipts (“anticipated gross loss”).
Step 2. Subtract 50% of the Paycheck Protection Program (PPP) amount and 100% of all other federal funds from the anticipated gross loss (“qualified loss”).
Step 3. Sum the qualified losses of all businesses (“total qualified loss”).
Step 4. Divide the total fund balance of $400M by the total qualified loss (“pro rata percentage”).
Step 5. Multiply the pro rata percentage by a business’s qualified loss.
Step 6. If the result of the previous step is above $350K, the business will only receive $350K; in all other cases, the business receives the amount calculated in Step 5.
As announced, it is a simple formula. Kinda sidestepped is how paltry this is; this program is merely just the icing on the top. Like when you look at a cake – the icing is very thin when you look at the height of the entire cake. So, I decided to try it with a “micro-small biz” set of numbers:
Step 1. 2019 – 10,000 2020 – 4,500
Step 2. $0 (no participation in any Federal program)
Step 3. $5,500
Step 4. $5,500/ $400,000,000 = 0.001375%
Step 5. $5,500 * 0.001375%
Step 6. $7.56
Yup, the icing on the cake amounts to $7.56. I bet that’s almost the cost of putting icing on a mid-sized cake.
Admittedly, an ultra-low cost example. You tell me if this is a help to a micro-sole proprietor, OK? Even if you take it up a magnitude, that’s just $75.
Helpful or a time waster? Or a hype-waster?
From my tipster (reformatted, emphasis mine):
…If you look at the formula announced Friday, a small business which did $1mil in gross sales in 2019 and who will see sales decline by 50% in 2020 is only eligible for up to $625.00. That is assuming the business received zero PPP or EIDL funds…That is simply a slap in the face to any small business. $625 to ‘relieve’ $500k in losses? On the other hand, the maximum grant is $350k. To qualify for that amount, a business would have to have gross sales losses of over 10mil this year. No business that is that big will be helped by 350k.
But – a small business that does 1-3 mil a year in sales that receives $30-60k could be saved. Initially, the Governor made it sound like the 400mil would be split evenly by all businesses who qualified. 13,000 applied. $400mil divided by 13k is approximately $31k per business. That kind of money would make a real difference for a SMALL MAIN STREET business.
(H/T: Tim)
