THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
18th February, 2021 0
As Governor Gretchen Whitmer’s unilateral Executive Orders have shifted over to mandates issued by the Michigan Dept. Of Health & Human Services, with the latest edict limiting occupancy to an unsustainable 25% of capacity limitation for live entertainment venues and restaurants, more than 34,000 Michigan small businesses recently applied for a share of $55 million in state grants made available through the Michigan Small Business Survival Grant program, which was designed to aid those businesses impacted by these restrictions.
A business could get a maximum grant of $15,000 if it has been partially closed or $20,000 if it is fully closed in accordance with state coronavirus restrictions.
There were a total of 34,487 businesses in the state of Michigan applying for these grants, with 15 different regional organizations administering them for all 83 counties in the state. According to Tom Miller, Jr. of Saginaw Future, “Through discussions with the Michigan Economic Development Corporation, we determined that the fairest and most expeditious way to get this grant money out the door was to have local granting organizations disperse the funds. We know the businesses within the region much better than the state authority does. We are a part of Region 5 and Saginaw Future administered the grants for Saginaw & Bay counties; whereas the Middle Michigan Development Corporation based in Mt Pleasant will handle Midland, Isabella, Clare, and areas that comprise the balance of Region 5.”
In terms of its share of the $55 million statewide revenue pie, Miller says that Saginaw & Bay Counties received a total of $1.95 million dollars. Rather than divide the money equally between all the 15 regional organizations, the amount received was based upon a formula developed by State, including the number of eligible businesses.
“Saginaw County had a total of 655 businesses apply for grants and we awarded funding to a total of 145 businesses,” continues Miller. “Bay County had a total of 222 businesses apply. While $1.95 million sounds like a lot of money, when you divide the funding up between the applicants and are dealing with hundreds of entries, once you rank and score each business the money runs out rather quickly,” admits Miller.
Each region had the latitude to develop their own strategies for money disbursement and according to Miller, the most difficult decision was whether to give large amounts of money to fewer businesses or smaller amounts to more businesses. “My theory behind it is that we want to spread the funding around to as many businesses as possible. I must have talked to a thousand different folks about these programs and I don’t care what of business you have, right now everybody is hurting,” he reflects.
“The strategy Saginaw Future adopted was to help as many businesses as possible while still being impactful,” he continues. “We have a general understanding of what the average monthly expenses are for these types of businesses. We are happy that these funds will provide some much needed working capital, however we understand that these grants represent a fraction of the resources necessary to be profitable. We decided not to give out any $20,000 grants and also decided to develop criteria for funding based on several factors: how many years the business has existed; how many employees it has and will retain; and also how much financial loss they’ve experienced during the pandemic.
“In terms of established businesses, we also looked at their resiliency and sustainability,” notes Miller. “For instance, businesses that managed to weather the recession of 2008 and 2009 and have high levels of customer loyalty and longevity on their side and were more suited to not weather the same percentage of loss as other businesses during the pandemic were also some of the factors we looked at.” In addition to how many employees they have, equally important to the business being open are how many employees they work with. Another focus for this program in particular was supporting storefront businesses - those entities with an actual physical presence, as this adds to the fabric of a community.”
“The other thing that’s important to stress is that this legislation that passed funding to the MEDC to distribute was really about helping those businesses most adversely impacted by the DHHS orders spanning the months of November & December; and separate funding was allocated for entertainment venues through an entirely different process.”
When asked what the average amounts of awards and grants were to those businesses that did receive funding, Miller says that the largest awards went to businesses with storefronts and many employees that suffered the worst economic impact. “At the very top of the scale we awarded $15,000 and then graduated the amounts down to $5,000.”
“Additionally, Saginaw Future had some administrative reserve money that we decided to convert into additional grant money in order to help smaller struggling businesses,” he concludes. “This was a completely separate program. This was the Restart Grant and one of the focuses was to assist women, minority and veteran owned businesses. About 80 to 90% of this additional funding went to assist businesses owned by women and minorities.”
Tim Mroz is Senior Vice President of Strategic Initiatives for The Right Place, one of 15 regional economic development organizations administering the grant program across the state for Region 11.
“For our region, which The Right Place will be administering the grant for, there were a total of 3,137 total applications that came through.” Mroz says 2,257 of those applications came from Kent County.
Another, smaller $3.5 million grant program for entertainment venues was reviewed and approved by the Michigan Independent Venue and Promoter Association by the end of February. Entertainment venues can qualify for a one-time grant of up to $40,000.
Please login to commentLOGIN
THE NEW GILDED AGE (Part 2)