Kelly Kenoyer
The COVID-19 pandemic has been incredibly hard on some local small businesses, even with the help available through the federal government.
And requirements to participate local programs meant to fill the gaps may be too strict to help many businesses that are still struggling.
A state and city-backed program to help struggling businesses during the COVID-19 pandemic has stalled significantly due to the state’s strict eligibility requirements, and just 15 percent of the funds have been distributed so far through the program, which is set to end in mid-October.
The Emergency Business Assistance Program is a federally-funded, state-administered grant program meant to help small businesses make ends meet.
The state matches local dollars to help provide grants for struggling businesses, but only if local agencies follow state eligibility guidelines, which are quite strict and have locked many beloved businesses out of the opportunity.
That’s because businesses that have already accessed any kind of federal CARES act funds are locked out of the program – even if that assistance came in the form of loans, not grants. That’s according to state rules that localities have to abide by if they want their own contributions matched.
“If you wanted their match, you had to play by their rules, you had to have their program,” said Sweet Home Economic Development Director Blair Larsen. In total, the city put $50,000 into the fund, with a state match putting the total fund at $100,000.
However, only $15,000 worth of grants have been allocated, and the time period for the program is drawing to a close.
“My understanding is, whatever the state funding that we don’t use, we have to give back,” Larsen said.
That’s because a lot of struggling small businesses don’t qualify because they’ve received a loan or grant from the federal government, even if it hasn’t fully covered all their needs.
“The number of businesses that we have that can apply for it is shrinking smaller,” Larsen said, so that the main applicants who can get funding are “sole proprietorships.”
Six businesses have won grants so far, each receiving the minimum payment of $2,500, Larsen said. The city got funding from the state in two phases of $25,000 each, and one of them is already past the 45 day deadline. There’s still some funding available through the program, but the deadline is Oct. 15.
Still, the reason for the limitations was to help get money to those who had received none yet.
David Bauer, the owner of Steelhead Fitness, said he no longer qualifies for any new assistance.
He received a $10,000 grant through the CARES Act, along with a $28,000 loan which he returned without using because of how quickly he would be required to repay it – just a year, he said.
He also has a $78,000 loan sitting in the bank that he hopes he won’t have to use, but which has a much more comfortable 30-year payment period. Grants are a much less risky prospect for a small business than a loan from the government.
Bauer said the funding at the beginning of the pandemic was mishandled. “You could get into the millions of dollars, that kind of killed small business,” he said, because the money was all gone within three days. “If they were a little slow, then they missed out.”
Bauer did get a bit more help than that – the U.S. Small Business Administration paid for his building loan for six months while he was closed. Now that the gym has re-opened, he’s hoping to get enough clients to start breaking even without dipping into the loan funds.
Right now, the gym has 500 or so members, but he will need 600 to 650 to break even, he said. “And that gives me no revenue, so I still have to figure out how to pay my bills at home.”
Bauer is left hoping the rains drive more customers indoors for exercise, even if they have to wear masks on the treadmill. He hopes the city is able to give payments out to other businesses in a tough position.
“There’s plenty of businesses out there that still didn’t get money and are struggling. And, you know, I want to see this community thrive,” he said.
Businesses like Bauer’s aren’t eligible for the additional help from Sweet Home’s program, even though there is still plenty of cash available. Larsen said that’s a frustrating situation, for the city and for businesses alike.
“It’s not going to help the Rio, it’s not going to help Steelhead, it’s not going to help any of the restaurants because they already took funding, and they’re out of eligibility already, or it’s just too small of an amount for it to really be even of any assistance for them. So the eligibility is kind of frustrating.”
Still, he understands why the state requirements are set up how they are. “We want this to go to people who have not been able to get funding, which is a noble thing,” he said. “What that does in reality, it has situations like this. So there’s unintended consequences all over the place.”
Larsen said Sweet Home isn’t the only community involved in this program and struggling to get cash in the hands of business owners. “I have heard from other communities that they’ve had eligibility hangups like this, and that they would probably have to give some money back to the state.”
Some hope the state will change eligibility requirements so localities can get the money into the hands of struggling business owners instead of returning it.
Still, there are other programs available through communitylendingworks.org, and Larsen suggests any businesses that are struggling should check the website to see if they can get assistance. Though the program is still in its infancy, those who fill out the web form now will be first on the list for assistance.
Anyone eligible for Sweet Home’s assistance can contact Larsen at [email protected]. Businesses with 0 to 5 employees can be awarded $2,500 to 5,000, and the awards go up from there based on the size of the business. Larsen encourages those interested in assistance to apply.
Anyone who is interested in the process can still put their name in the form.