The Elusive Small Business Grant Program

Updated: Oct 5, 2020

Small businesses are disappearing right in front of our eyes while the state leadership sits on the funds literally designed to save them. Only after a petition spearheaded by LT Governor Dan Mckee has the state even decided to allocate any of the funds provided by the federal government (1.25 BILLION) to small business grants. The initial application process eliminated the smallest of business, sole proprietors, who incorporate 73 percent of all businesses nationally. Just recently, the application was expanded to include sole props, but the hoops to required still leave a lot to be desired.

Both the initial application and current one require a business owner to complete an excel questionnaire to see if they qualify. Questions regarding full time employees, part time employees or independent contractors currently working at least 15 hours a week, as well as Duns number requirements, effectively eliminate many small businesses. The best part of the application is the qualifying expenses, of which you can list from March to December 2020. In our specific case, we had over 20K in rent expenses listed, only to be offered a grant of $2500. In addition, small business owners that do not rely on business income for at least 30 percent of their living are automatically eliminated. So once one completes this pre application, a decision is made and if you do not qualify then it ends there. If you get past that first hurdle, you get an email from a company called Community Reinvestment Fund, USA (CRF) with more information to fill out and paperwork to upload that is the basic equivalent to the amount of paperwork required for a mortgage. These forms include but are not limited to, a Duns Number, pre approval excel spreadsheet, bank statements, federal and state tax returns for personal and business, state id documentation and an attestation form for credit checks. If you decide that you are willing to upload these documents to a company based in Minnesota and sell your soul for the minimum grant, shockingly you get an amortization schedule with payback terms. In fairness, Commerce RI publicly states to ignore this, as well as the aforementioned attestation; however, these two items are enough to turn off many business owners as the implication is that this “grant” could very well turn into a “loan”.

Important to note that the state has allocated 50 Million in funds for these grants. To date they have distributed approx 10 Million worth of grants between 2500-15000. The original ask by the petition was to allocate 125 Million of the Cares Act Funds to small businesses for this program. Since the state has made it so difficult to obtain the funds (by design in my opinion), I predict they will see no need to add more funding to the initial 50 Million and as a result, will do what they please with the undisbursed funds.

Interestingly enough, the state leadership touts all of the programs that they have designed to help small business, including the PPP fund program (federal), the laptop program (Microsoft donated), the unemployment boost (federal), the stimulus program (federal), etc, etc. Yet here they have the opportunity to actually develop a program on their own to assist Rhode Island small businesses and they refuse to do so in a manner conducive to that goal. Instead, leadership is actually restricting the funds needed to keep business afloat.

There are a slew of businesses that were able to benefit from the above mentioned programs, including some of the most hardest hit in the restaurant industry. The unemployment boost was effective in allowing families to pay rent, bills, food shop and support local eateries as they had these funds. "Non Essential" businesses such as dance studios, karate dojos, art studios, hair salons, yoga, etc, etc, (those that provide an exclusive in person close contact service) received none of the benefits of this stimulus effort however, as they were all forced to remain closed during the height of the monetary assistance. Now as these assistance programs have been halted, consumers lack the funds and/or the desire to return to normal activities, especially in light of the school considerations.

So going forward it is the goal to put pressure on the state to expedite and streamline the process of obtaining these “grants” for the businesses that require them to remain open. On a personal note, my wife’s business is entering it’s 32nd year. We have been through many ups and downs over this time and have been able to relocate, recover, and continue growing and learning from each occurrence. Having struggled to keep the business open and find a suitable location within our hometown, it would be catastrophic to have to close while the available assistance collects interest in the state’s coffers. All business owners deserve the right to close on their terms, not as a result of a state’s negligence to properly distribute federal funds intended for them.

With that in mind, I discussed these issues with the LT Governor on his weekly podcast. The office of the LT Governor is working hard within the guidelines provided by the state but we need more. Link is here:

In addition, I have written a resolution for the town council to consider at the October 7th meeting in hopes they will approve and request that other cities and towns follow suit. The agenda link is listed below:

And corresponding resolution:

Please consider contacting your representative and urge support of this resolution, as well as contacting state leadership requesting a release of funds to keep the smallest businesses in the smallest state alive. Also consider joining the Small Business Coalition, the driving force behind these efforts:

Good luck to all of the small businesses out there and feel free to contact me with any ideas, issues or concerns to consider going forward. A special thank you to Dan Mckee, the LT Governor, and his entire office for their efforts regarding this issue.

You can contact his office here :

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