COVID-19 Webinar: Money to Small Businesses: Loans, Grants, and CARES Act Funding

by Daniela Leon, IEDC Intern 

On June 29, IEDC hosted a webinar session for economic developers to share insights on ways to amplify and direct funds toward investment in small businesses. The expert panel was moderated by Bethan Flynn, Senior Project Manager at Coastal Cloud, and included Eloisa Klementich, President and CEO of Invest Atlanta in Atlanta, Georgia; Rebecca Moudry, Director of the Department of Economic Initiatives in Fairfax County, Virginia and Patricia McCay, Senior Assistant County Attorney of Fairfax County. The panel offered examples from loans, grant programs, and the management of CARES Act funding in their respective communities. 

Invest Atlanta Grant and Loan Packages 

Invest Atlanta has implemented a series of relief packages that center on advancing equity work, especially since COVID closures and social distancing measures have caused disproportionate impacts for Minority and Women Owned Businesses (MWBEs). Amplifying relief for minority owned businesses is not only important, but also necessary since many of these businesses have not traditionally received financial support prior to the pandemic, and have not been able to leverage Paycheck Protection Program funding. One of the programs offered to offset the effects of COVID-19 is the  Strength in Beauty Fund which facilitates private philanthropic grants to the independent cosmetology workforce. The fund enables eligible applicants in the beauty industry, including hair and nail salons, to receive a grant up to $1,000. Funding for these loans was primarily from the City of Atlanta General Fund. 

For Invest Atlanta, establishing a community outreach plan was instrumental in ensuring that relief strategies can reach all segments of the community. To get the word out about their grant and loan programs, Invest Atlanta worked with business and community partners and councilmembers to share resources on social media and in newsletters. They also used a variety of other methods of outreach including postcard mailers, radio PSAs, in-store fliers, and church outreach. 

Using CARES Act Funding to Buoy Small Business

In Fairfax County, Virginia, relief for small businesses has unfolded as the Fairfax RISE grant program. This relief grant fund offers financial assistance to small businesses and nonprofits adversely affected by COVID shutdowns, and is funded by allocations from the CARES Act. The program has centered equity by designating 30% of total funds for MWBEs  and/or veteran-owned businesses. Orienting funds toward minority populations, both individuals and businesses, in the form of grants and resurgence funds is an important starting point for any relief effort. 

Fairfax RISE was designed with the help of the County’s legal team, which did a close reading of the CARES Act to ensure that all federal guidelines were being followed in disbursing funds. Specifically, the grants had to address costs that incurred in the time period starting on March 1, 2020 through the end of the year. In line with language in the CARES Act, the grants are designed to  reimburse the costs of business interruption caused by required closures. This can include employee compensation, equipment costs or rental, business inventory and purchases, rent or lease payments, and working capital and other business critical operating expenses. 

Of the total $25 million program, Fairfax County established  $10,000 grants for 1-10 employee entities, $15,000 grants for 11-25 employee entities, and $20,000 grants for 26-49 employee entities. Having identified the unique eligibility guidelines for small businesses, non-profits, and independent contractors, Fairfax County was able to reorient funds from other sources toward applications that could not meet the federal guidelines and receive Fairfax RISE grant relief.

To use CARES Act funding for grants and loans to small businesses, economic developers and local governments should be thoroughly informed on the details and legal considerations of federal packages. Clear understanding of the eligibility requirements and Treasury issued guidelines (or lack thereof) ensures that communities make adequate and efficient use of federal funds, and are prepared to quantify measurable results.