Dear Coalition Members,
As recent reports indicate, cases of the COVID-19 Delta variant are increasing across the nation. With rising case numbers and diminishing capacities at local hospitals, it's looking inevitable that society's return to a 'new normal' could once again be placed on pause. We empathize with small business owners and entrepreneurs across the state, knowing that many are now left grappling with what the reality of a second wave may mean for their business, while still recovering from 2020's lost revenues.
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Coalition Membership Update |
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And yet, as of June 2021, North Carolina is on pace for a record number of new business formations. The office of Secretary of State Elaine Marshall reported 96,000 new businesses have been registered since January, representing an 80% increase from this time last year. With her office now projecting 191,600 new businesses to be formed in 2021, it comes as no surprise that just last month CNBC ranked North Carolina No. 2 on its list of "America's Top States for Business".
While the Secretary's numbers are cause for celebration, recent news serves as a reminder that we are still living in the midst of a pandemic and small business owners and entrepreneurs, both new and existing, remain in need of added supports.
With the passage of the General Assembly's House budget last week, we now have a better picture of what small business owners, and business supports providers may see in terms of supports from the 2021-23 biennial budget.
Please read more in the legislative news section below. You can also sign up for our Rural Counts newsletter and follow @RuralCounts on Twitter to stay up-to-date on the most pressing policy updates, news, and resources affecting our state's small-business ecosystem.
All our best,
The Rural Counts Team
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Legislative News and Updates |
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2021-2023 FYS Budget
The budget has been the focus of attention on Jones Street the past several weeks. Legislators had substantial funding availability this year, including federal funds from the American Rescue Plan Act (ARPA) and astounding growth in General Fund revenues, which came in 24% higher than 2020-2021 FY. Notwithstanding this significant funding, legislators agreed to cap general fund operating spending for the 2021-2022 fiscal year at $25.7 billion and $26.7 billion for the 2022-2023 fiscal year. Both the House and Senate respected these levels in their budget proposals. The Senate passed their version on June 25, and the House passed their proposal on August 12.
Tax cuts were expected and delivered in both budgets. The House budget offers more tax relief upfront through allowing for the full deduction of business expenses paid for with federal relief funds, but the Senate cuts more over time. The Senate tax cuts would be 3x size of the House's proposal by 2026-2027. Individual and corporate taxes proposal break down as follows:
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Additionally, both the Senate and the House budget proposals include a provision that would provide grants to small businesses that suffered economic loss due to the COVID-19 pandemic. A key difference between the two is that the Senate will only deem businesses eligible if they did not receive any assistance from other COVID-related relief programs, such as the Paycheck Protection Program (PPP). The House budget does not include this provision. The Senate program focuses on all small businesses with at least 20 percent revenue losses over the past year, while the House focuses primarily on leisure and hospitality businesses with over ten percent revenue losses.
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Bills of Interest
Beyond the budget, there has been movement on a number of bills relevant to North Carolina's small business owners. Read more below about the bills the NC Rural Center has been following.
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H680: Reenact Qualified Business Venture Credit- reinstates tax credit for people who invest in certain businesses—including manufacturing, processing, warehousing, wholesaling, research and development, service-related, or commercialization of IT-related industry—that has a gross revenue of up to $5 million. The bill also increases the tax credit by 10 percent for investments made in opportunity zones or Tier 1 or 2 counties. The bill was referred to the House Finance Committee on July 20.
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S228: Allow Employers to Offer EPO Benefit Plans- Allows insurers to offer exclusive provider benefit health plans. These plans would only offer out-of-network coverage for emergency services and for medically necessary services in situations when an in-network provider was not reasonably available. The bill passed the Senate 49-0 on May 5. The bill was referred to the House Insurance Committee on August 4.
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NC IDEA has announced their Fall 2021 grant cycle supporting early-stage, growth-oriented companies:
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NC IDEA MICRO - $10K to young companies looking to validate and advance their idea.
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NC IDEA SEED - $50K to innovative startups with a proven concept.
Application deadline is August 30th at 5:00pm EST. Click here for details.
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The SBA is launching a streamlined application portal to allow borrowers with Paycheck Protection Program (PPP) loans under $150,000 through participating lenders to apply for forgiveness directly through the SBA.
The new forgiveness platform began accepting applications from borrowers on August 4, 2021. Lenders are required to opt-in to this program through directforgiveness.sba.gov.
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The American Rescue Plan Act extends a number of critical tax benefits to small businesses, including the Employee Retention Credit (ERC). The ERC is a refundable and advanceable tax credit for small businesses based on the number of qualifying employees.
The National Federation of Independent Businesses (NFIB) hosted a webinar to help small business owners navigate the ERC claims process. View the webinar recording here.
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Rural LISC is hosting an informational webinar, 'Accessing Capital for Rural Small Businesses' on September 1 from 4 PM - 5 PM. LISC serves small businesses overlooked by traditional financing channels by providing flexible loan options and technical support. During this webinar, you'll learn more about their suite of commercial and real estate loan products available to for-profit businesses located in underserved neighborhoods and rural communities. Click Here to RSVP.
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The Economic Development Partnership of North Carolina (EDPNC) is teaming up with TikTok to host a virtual “Small Biz Block Party” for North Carolina small businesses interested in learning how to use the popular video-sharing platform to attract more customers and grow revenue.
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The U.S. Small Business Administration has announced its 2021 National Small Business Week Virtual Summit for September 13-15, 2021. This year’s events will spotlight the resilience of America’s entrepreneurs and the renewal of the small business economy as they build back better from the economic crisis brought on by a once-in-a-lifetime pandemic.
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Encourage Your Networks to Join the Coalition! |
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Please take a moment to share this coalition newsletter along with the materials above with your friends, colleagues, and networks so we can make an even bigger impact on behalf of North Carolina’s small businesses. Encourage them to join you in voicing their support for our state’s entrepreneurs and small business owners.
Here is a sample message to send to your friends, colleagues, and networks:
Please join me in voicing your support in ensuring that North Carolina’s entrepreneurs and small-business owners have equitable access to the capital, resources, and tools needed to prosper. By signing on as a member of the North Carolina Small Business Coalition, you will have access to news, resources, and policy updates regarding small business in North Carolina.
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If you have questions about any of the above news items or resources, please don’t hesitate to contact us. As the NC Small Business Coalition progresses, we plan to continue providing timely news, resources, and policy updates relevant to the small business ecosystem across the state. If you have an opportunity or resource you’d like us to share with the coalition, please forward it to mkirksey@ncruralcenter.org.
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