Michigan Afflicted Business Relief (ABR) Program: What to Know Before Applying this March
On February 16, 2022, the Michigan Department of Treasury (“MI Treasury”) began the public rollout of the State’s Afflicted Business Relief (“ABR”) grant program, which will distribute up to $409 million of the State’s American Rescue Plan Act appropriations through grants to “afflicted businesses” that have suffered financial hardship from the COVID-19 pandemic.
Miller Johnson will host a webinar at 8am on Monday, February 28, during which Erik Daly and Wei Wang will discuss the ABR program in more detail.
In advance of our February 28 webinar, we are highlighting below several aspects of the ABR program that clients and other businesses with operations in the State of Michigan may wish to consider ahead of the March 1 opening of the ABR grant application window:
- Unlike the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”), Michigan’s ABR program will not be administered or funded on a “first-come, first served” basis.
- Instead, MI Treasury will open the entire month of March 2022 to receive applications from eligible businesses and will make no awards until April 1, 2022 (at the earliest).
- As a result, we are hopeful that the ABR grant process will be less chaotic than the SBA’s initial PPP rollout nearly two years ago.
- Consistent with the above, the ABR program application window will open at 8 am on March 1, 2022 and close at 11:59 pm on March 31, 2022.
- MI Treasury is conducting its own webinars, which it is making available (together with a two-page Fact Sheet and Frequently Asked Questions) on-demand at the following website: michigan.gov/abr
- In general, to be eligible to receive an ABR grant, a business must have a physical presence and conduct business in the State of Michigan and be one of the following business types:
- Entertainment venues
- Recreational facilities or public places of amusement
- Cosmetology or barber services
- Exercise facilities/gyms
- Restaurants and other food service establishments
- Nursery dealers or growers
- Athletic trainers
- Body art facilities
- Hotels (including B&Bs)
- Detailed definitions related to all of the above eligible business categories and additional eligibility requirements can be found at michigan.gov/abr
- Note that tax-exempt organizations and governmental entities are categorically ineligible for ABR grants
- During the application process, eligible businesses must furnish MI Treasury with certain supporting documentation and make a series of certifications, which we will review during our February 28 webinar.
- The ABR grant calculation methodology is driven by a number of factors, including the applicant’s decline in 2020 sales (including, for this purpose, any forgiven PPP loans and certain other SBA, state or local grants or awards received) compared to 2019 sales; Michigan State property taxes and/or real estate rental payments for facilities located in Michigan; the applicant’s State Unemployment Insurance (SUI) contributions in 2020; and select fees paid to governmental entities.
- Businesses that did not experience at least a 5% decline in 2020 sales (including, for this purpose, any forgiven PPP loans and certain other SBA, state or local grants or awards received) relative to 2019 sales are not presently eligible to receive ABR grants
- We will review the grant calculation methodology and address some FAQs in more detail during our February 28 webinar
We anticipate that many Michigan businesses that were required to close, suspend or meaningfully scale back operations during 2020 as a result of various State or local orders, laws or regulations will be eligible to receive ABR funding. However, some eligible businesses may determine that the amount of their potential ABR grant is not worth the time, expense and resources involved in applying for the funds, and some may wish to avoid the disclosures and certifications that must be made to receive ABR funds.
Additionally, if total grant awards exceed $409 million, individual awards will be prorated to ensure all eligible businesses who qualify receive some level of funding, which may further reduce the incentive for certain otherwise eligible businesses to apply.
We look forward to discussing the above and other considerations during our webinar on the morning of Monday, February 28 (8am). We hope you will join us by registering here.