United States

Illinois offers $250 million in grants for COVID-19 recovery

TAX ALERT  | 

Beginning Aug. 18, 2021, the Illinois Back to Business (B2B) grant program continues the state’s COVID-19 recovery response by offering $250 million in small business grants for businesses impacted by the pandemic. The B2B program is a follow-up to last year’s Business Interruption Grant (BIG) program that directed $290 million to businesses across the state before those funds were exhausted. 

Funding and eligibility

The B2B program will offer $250 million in grants to small businesses that experienced losses in 2020 due to COVID-19 distributed among a number of categories including, businesses located in disproportionately impacted areas, arts and entertainment businesses that did not receive ‘Shuttered Venue Operators’ grants, restaurants and taverns that did not receive assistance from the ‘Restaurant Revitalization Fund,’ hotels and businesses that did not receive a BIG grant due to lack of funding. Grants from $5,000 to $150,000 per business and can be used to cover a wide-range of costs including operations, employment and overhead. Qualifying hotels are eligible for grants up to $250,000.

A highlighted, but non-exhaustive, list of eligibility requirements is detailed below. Eligible businesses must have:

  • Operated during or before December 2019
  • Generated less than $20 million in gross operating revenue in calendar year 2019, prorated if operation was less than a year prior to December
  • Experienced a loss in revenue of at least $5,000 in 2020 due to economic disruptions related to the COVID-19 pandemic
  • Reduced operations due to a government order, public health guideline or depressed consumer demand during the pandemic

The B2B program will prioritize grants to ‘hard-hit industries.’ Some of the priority industries include hotels, restaurants, certain live venues, performing or presenting arts organizations, clothing and retail establishments excluding e-commerce, dry cleaning and laundry, gyms and fitness centers and tourism. Priority will also be given to designated ‘hard-hit’ areas, businesses that have yet to qualify for state funding or federal assistance (such as Paycheck Protection Program loans, BIG funding and Shuttered Venue Operators Grant funds, among other assistance) and businesses with less than $5 million in 2019 revenue. 

Additionally, a number of businesses are ineligible including certain independent contractors or freelance workers that do not operate a sole proprietorship, private clubs or businesses that limit membership, businesses that generate at least 33% of gross revenue from legal gambling, a business that derives a majority of its income as an owner of real property that leases that property to a tenant or tenants under a lease agreement, businesses primarily engaged in political or lobbying activities, night clubs, employment agencies, pawn shops, liquor stores, storage facilities or businesses similar to those listed. 

Next steps

Qualifying businesses are encouraged to act quickly to review their eligibility for the grants as the total amount available is limited and interest is anticipated to be high. The final day to apply is Oct. 11, 2021, but businesses should not wait for that date. The B2B program will require a number of documents including business owner information, business composition information, 2019 and 2020 federal tax returns, business bank statements for selected periods and an application to the program. Additionally, there is significant nuance in some of the eligibility criteria that will need to be examined closely. Small businesses that have questions about their eligibility or would like to discuss an application to the B2B program should contact their state and local tax credits and incentives adviser. 

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