Small Businesses Finding It Difficult to Secure Grant Money
Original Article posted by Newport This Week, can be found here
About $45 million in state grants remain available to small Rhode Island businesses that have been decimated by the pandemic. But getting the money to applicants via Restore RI has been a difficult process to untangle.
The money is part of the $1.25 billion given to the state in the federal Cares Act. Of that, $50 million was set aside to be distributed to small businesses, but only $5 million has found its way to those who need it.
Most agree that the applications are a time-consuming process that must be tweaked and be more inclusive, and that the grants should be larger. Many applicants, depending on size and losses, are only eligible for $2,500.
“Ninety percent of our chamber members have less than 10 employees, [and] small businesses are eligible for a relatively small amount in that grant program,” said Erin Donovan-Boyle, executive director of the Greater Newport Chamber of Commerce. “When they look at it, they have to measure the amount of paperwork with the grant reward, so I do think that is a deterrent. Most don’t have a bookkeeper on staff, so it can be cumbersome.”
Donovan-Boyle said she anticipates that Commerce Corporation of R.I., the agency taking the applications and distributing the money, will adjust to allow seasonal businesses to be eligible, along with those who have no employees.
During her briefing on Wednesday, Sept. 16, Governor Raimondo addressed the Restore RI grants for small businesses, announcing that requirements have now been modified, effective immediately, to expand eligibility for additional, smaller businesses and for those with no employees.
“We have advocated for different types of grants … grants not just based on revenue loss,” she said. “This one grant is specifically targeted for revenue loss.
“That can be done on a state level. There are ways it can be tweaked,” she said, including increasing the grant amounts. “$50 million is dedicated to this grant program. I don’t think the governor is holding onto that specific money.”
Donovan-Boyle was referring to a related matter last week when Gov. Gina Raimondo announced that she is holding onto around $900 million of the remaining federal grant in case Washington fails to send the states more aid. She also announced she wants to extend her executive powers indefinitely. That bristled many statewide and raised questions.
There is talk the governor wants to use the remainder of the money to “plug state budget gaps,” although it is not clear that this will be allowed under current federal guidelines. The General Assembly, which will not meet until after the Nov. 3 election to discuss the issue, is hopeful that the feds will change the rules on how the money is to be utilized.
“The governor is certainly hopeful that the overall $1.2 billion Cares Act money will be revised by the federal government,” said Donovan-Boyle. “The $50 million is restrictive. I don’t think the Cares Act dollars are going to change how it is utilized. This particular program will not necessarily change by federal guidelines.”
Sen. Lou DiPalma (D-District 12) said what is being offered needs to be simplified and expanded.
“It has been difficult to apply and work through the process, extremely time-consuming,” he said. “It’s also restrictive to a sole proprietor with no employees.”
He added that businesses that did not reach a revenue loss threshold were ineligible.
“We need to change it. Period. No ifs, ands or buts about it,” he said. “Forty-five million is sitting there. Part of the reason it’s sitting there [is because the application is] difficult to complete. The amount they are getting is not necessarily worth the time they take to do it.”
DiPalma said the original $1.25 billion in aid was the minimum Rhode Island could receive. He finds the governor’s reasoning specious.
“If all the money that has been allocated has been spent, we will still have somewhere between $410 and $502 million available,” he said. “So, the governor could still use it in some fashion as soon as federal clarifications are in place.”
DiPalma, who has served on the Senate Finance Committee for 12 years, hopes that Congress will relax the regulations and restrictions on how the Cares Act money may be used.
“There is no guarantee more money will come. Congress cannot get out of its own way,” he said.
The fiscal year ended in June. Whatever happens now will impact the delivery of state services in July 2021, he added.
“Small businesses are our lifeline,” said DiPalma. “They are all impacted by our delay. We’re still not there. While we lost time, we can still correct the process and allow all the small businesses to return to prosperity.”
Lt. Gov. Dan McKee championed the push for grants for local businesses. McKee holds a virtual workshop webinar on the subject every Tuesday. It may be found at rismallbusiness.org, with key information on state resources, the loan process and the reopening process, among other contact links.
“We really need to keep this conversation going,” said McKee in a recent webinar. “Right now, the money is going out slower than we want, and not as much as we think could be there, and there is a hesitancy because there is a thought process that we can use those funds to fill holes in the state budget. Guidelines don’t currently allow that, but we can do both.”
Further information is available at commerceri.com/about-us/ restore-ri.