Nevada is launching a new, broad-based grant program for businesses and nonprofits that suffered pandemic-related hardship after an earlier effort to offer commercial rent assistance was able to get less than half of its funds out the door.

Lawmakers on the Interim Finance Committee voted on Friday to authorize $20 million in federal coronavirus relief dollars for the Nevada COVID-19 Emergency Small Business Recovery Grant Program. It comes after the Commercial Rental Assistance Grant program, which was also allocated $20 million, was only able to award $8.5 million.

“We went out and tried to give this money away, and it was more difficult than we thought,”  state Treasurer Zach Conine told legislators. “I think that's because of the process.”

Federal coronavirus relief funds must be spent by the end of the calendar year, and commercial rental help is not the only program with a relatively low disbursement rate. Less than 10 percent of the $70 million Nevada applied to tenant rental assistance has been distributed about halfway through the program’s existence.

The commercial rental assistance program — which stopped accepting applications earlier this month — received 1,465 pre-applications from businesses and pre-approved 1,335. But only 831 applicants will actually have money sent to their landlord on their behalf.

Businesses were disqualified from the commercial rental assistance for a variety of reasons, including failing to fully submit supporting documentation showing they suffered a revenue loss of 30 percent or more, having more than 50 employees and not having an up-to-date business license. Successful applications also needed involvement of the landlord, who had to accept the money and promise not to evict the tenant in the next three months.

The program required state staff and others to coach many commercial tenants through the application process and field hundreds of inquiries.

“It is a complicated program,” said Michael Brown, head of the Governor’s Office of Economic Development (GOED). “The treasurer and the team of people in my office and his office have been trying to figure out how we simplify this next program.”

The new program has far fewer strictures. Businesses can receive a grant of up to $10,000 if they have experience and can prove hardship because of the pandemic, are located in the state, have an active business license as of March 1, have no more than 50 employees and have annual gross revenue of less than $4 million.

Nonprofits and arts and culture organizations are not subject to the employee limit. Arts and culture organizations are eligible for up to $20,000; lawmakers noted those groups have been particularly hard-hit by restrictions on large-scale live entertainment.

Funding is prioritized in the following order: disadvantaged business enterprises (those owned by women, minorities, veterans or people with disabilities), arts and culture organizations, chambers of commerce, other businesses and other nonprofits. 

“The thing that we're seeing in economic assistance programs around the country is that it makes sense to prioritize who gets funds first, but not to have eligibility criteria that prevent people from applying,” Conine said. “And the easier it is, the more businesses will do it.”

Businesses and nonprofits will receive the money directly, rather than the funds flowing to the landlord, as in the commercial rental assistance program. Grantees must state how they plan to use the money, but can spend it on a wide range of expenses, including payroll, rent, utilities and on inventory.

“The goal of the program is to be very, very, very flexible for businesses,” Conine said.

An application portal is expected to be available on the GOED website.