open sign Fayetteville is receiving nearly $40.5 million in federal pandemic aid to help the city recover from the ongoing COVID-19 pandemic, and $5 million of that will go to businesses that were burdened by the economic effects of the virus.

The $1.9 trillion American Rescue Plan Act, known as ARPA, was passed by Congress and signed by President Joe Biden in March 2021. The purpose of ARPA is to help municipalities, counties, states and tribal governments recover from the pandemic.

According to guidance from the U.S. Treasury, ARPA recipients can use the aid to fund public health initiatives; recoup private and public economic loss from the pandemic; pay for workers in critical industries who are exposed to the virus; and invest in infrastructure related to water, sewer and broadband.

All funds received from ARPA must be allocated by the end of 2024 and spent by the end of 2026.

Fayetteville’s ARPA portion was split into two parts valued at about $20 million each. One part was received in May 2021 and the other a year later.

While the most recent payment to the city has yet to be allocated, the $20 million portion from May 2021 will be spent on business, housing and infrastructure needs, each receiving $5 million. This allocation was made official by the City Council in April, Carolina Public Press reported.

The remaining $5 million will be spent on administrative costs, according to city officials.

Infrastructure will primarily be used for drainage improvement and City Hall renovations, and the housing portion will be used on a housing affordability trust fund.

Here’s how local businesses can benefit from the remaining $5 million.

How business portion will be spent
Among the funds being spent on recovery for local businesses, $3 million has been set aside for Fayetteville’s ARPA-funded Small Business Relief Grant Program. Businesses with 200 employees or fewer are eligible to apply for the program.

Another primary eligibility requirement, among others, is that the business is located within a qualified census tract. These tracts make up most of downtown and northwest Fayetteville.

If not in one of those tracts, the business must commit to hiring or keeping employees of low to moderate income.

Certain businesses are not eligible under the program. These include franchised stores, liquor stores, vape and hemp shops, national or regional chains, child care centers and financial institutions, among others.

Businesses that have seen a net revenue growth of 10% or more are also not eligible due to federal regulations associated with ARPA.

Any business that existed before the pandemic began and meets the revenue growth requirement is eligible under ARPA if it can show decreased net revenue, costs to the business from COVID mitigation efforts and challenges with affording payroll, rent or mortgage and other operating expenses.

Any amount awarded, which has a maximum of $50,000 per business, can be spent on payroll, mortgages, rent, assistance with business planning or any costs associated with the pandemic.

Among the business portion, there is also $500,000 for the Commercial Corridors Improvement Grant. This grant, which also has a maximum of $50,000 per business, can be spent on rehabilitation of commercial properties, exterior improvements, security and landscaping, among other items.

Under this grant, businesses must also be in one of the qualifying census tracts. Unlike the other grant program, even businesses with a growth rate of 10% or more, as long as they are located in one of the census tracts, are also eligible.

The remaining $1.5 million will be spent on business assistance loans and child care assistance.

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