When the pandemic started in March, LaToya Rozof’s dress shop, 79 Roze Dress Shop in Olathe, took a huge hit. A majority of her sales came from her in-store appointments, which were forced to stop during the pandemic.
Like thousands of other small businesses, Rozof is picking up the pieces after months without a steady income, but she still hopes to receive some kind of support from available CARES Act funding that’s being sent to state and local governments to assist with recovery in their area.
Rozof can count herself as lucky: she survived. That, in itself, is a great feat considering the Federal Reserve Bank estimates a 41% decline in Black-owned businesses between February and April of this year.
“These firms had weaker financial cushions, weaker bank relationships, and preexisting funding gaps prior to the pandemic. COVID-19 has exacerbated these issues and businesses in the hardest hit communities have witnessed huge disparities in access to federal relief funds and a higher rate of business closures,” said Claire Kramer Mills, assistant vice president at the New York Federal Reserve.
The Federal CARES Act distributed nearly $521 billion in loans to small business under the recently shuttered Paycheck Protection Program (PPP). However, with fewer than 1 in 4 Black-owned employer firms and 1 in 10 Black-owned nonemployer firms having a recent borrowing relationship with a bank, it’s not surprising that Black businesses were underrepresented in PPP funding and find themselves still looking for aide.
Because of this lack of banking relationship, the Federal Reserve report questioned the use of banks to administer federal, taxpayer-supported relief programs. That’s why many of the upcoming small business relief programs don’t involve banks and the funding decisions often don’t require credit or financial information, but are most often based on need and the impact COVID has had on the business.
Best yet, many of the programs are in the form of grants, with no requirement for prepayment.
That’s particularly beneficial for small Black businesses who often veered away from PPP and Small Business Administration programs because they felt they wouldn’t qualify or because they didn’t want to take on any debt.
Opportunities for small business funding
Because grants are more favorable than loans, they go incredibly fast, so small businesses must be prepared to act quickly and stay up to date on new opportunities. Missouri received $30 million from the CARES Act to support small businesses, but the program had so many applicants, exceeding the funding available, and they closed the applications early.
It is important to stay ahead of these funding opportunities so that your application is considered.
Clay County received $1.5 million to support small businesses that have been disproportionately impacted by COVID-19, and they are awarding grants between $5,000 and $50,000 to qualifying businesses. To be eligible, the business must be private and for profit, must be located in Clay County, must employ two to 75 employees, and must be non-essential businesses not directly involved in COVID-19 response like retail, entertainment, food service and hospitality. Home-based businesses are not eligible. To apply, go to: https://edckc.com/cares-clay-county-grant-program/cares-clay-county-grant-application/
For those small businesses located in Jackson County and Wyandotte County, so far there has not been CARES funded grant programming announced for small businesses, but there is still a chance. Although Kansas City only received $18 million for COVID-19-related response, there is more funding that needs to be dispersed that could cover grants for small businesses. Wyandotte County also received over $37 million, but so far only $9 million has been allocated to local nonprofits and organizations assisting with COVID-19 response, but the Unified Government Commissioners have expressed an interest in developing a funding program for small businesses.
Sedgwick County has designated $5 million from the CARES Act for grants up to $5,000 for small businesses that experienced a disruption in business due to the pandemic. Applications opened Aug. 17 and close Sept. 4. The applying small businesses must be for profit and have no more than 50 employees. Publicly traded companies and nonprofits are not eligible. The grant can only be used for utilities, vendors, suppliers, rent or mortgage payments incurred between March 1, 2020, and Oct. 31, 2020. The funding can also be used for adjustments to delivery of services like equipment to enforce social distancing and other supplies necessary to participate in Wichita’s “Open Streets ICT.”
Small businesses in Kansas can also apply to the state’s Economic Development and Connectivity Grant, which totals over $130 million worth of grants. Small businesses in Kansas can apply for grants that vary depending on the type of business and amount of revenue. The business must be a for profit or nonprofit, in good standing with the Kansas Secretary of State, and must be able to show a loss of at least 25% of gross revenues between Jan. 1, 2020, and June 30, 2020, over the previous period of July 1, 2019, to Dec. 31, 2019. The business must plan to use the funds for working capital expenses. The application opened on Aug. 19 and will award grants on a rolling basis until the funds are depleted, which means applying earlier is better. Apply here: https://kansasdepartmentofcommerce.formstack.com/forms/small_business_working_capital
The Local Initiatives Support Corporation (LISC) is also giving small business relief grants, with priority on entrepreneurs of color, women and veteran-owned and other businesses in historically underserved facing areas. Nonprofits are not eligible for these grants. The next round of grants will open Aug. 31. Be sure to register here to be notified when the application will open: https://confirmsubscription.com/h/r/6FF3E206B37FBDE42540EF23F30FEDED
The next federal stimulus package may also include additional funding for small business relief. Proposals for expanding PPP, creating federally guaranteed loans and partially forgivable loans have all been put on the table for consideration.
Additionally, there are many other opportunities for grants online. Try looking for grants specifically associated with your area of business and consider searching for grants through your trade association.