On Monday, August 10, the first round of approximately $100 million in grant funding for Main Street and Historically Disadvantaged Businesses was released. This unprecedented investment of federal dollars, through legislation passed by the Pennsylvania General Assembly, is absolutely critical in restoring the livelihoods of small business owners and is historical in its prioritization of Black- and brown-owned businesses, especially those which do not have access to credit or relationships with big banks. Every single business that applied for this funding was in need, and not a single ounce of politics was involved in the awarding of grants. Moreover, for an appropriation of $200 million, 50,000 statewide applications were received amounting to approximately $1 billion in need. In Philadelphia, the two grant programs received over 5,000 applications, with 1,130 grants awarded in the amount of approximately $22.6 million. Again, the need greatly outpaced the available resources for this program at this time. A second round of funding is now open and will be awarded next month, and businesses that applied in the first round will be in consideration for the next wave of funding – with no preference given to those who applied in either round.
Given the small amount of awards available and reactions from business owners in my community, I felt the need to explain to the best of my knowledge how this historical funding was awarded. The $200 million in federal CARES Act Funding was designated by the General Assembly, and once enacted was quickly in place. Community Development Financial Institutions (CDFI), partnering with an online lending platform, developed secure and relatively easy application guidelines that specifically included businesses which had been left out of the EIDL and PPP loan programs from the Small Business Administration. Applications were scored based on many factors, including but not limited to the following:
- Type of business and COVID-19’s effect on that sector. A large portion of the grants awarded under the first round went to small restaurant operators (27.5%) and personal care services such as barbershops and beauty salons (26%).
- Owner-operator income. Preference was given to low and moderate income owner-operators.
- Amount and magnitude of operating losses
- For the Historically Disadvantaged Small Business program – The maximum number of awards per each county was indexed by minority population in order to provide fairness statewide. Philadelphia and Delaware Counties both received the maximum number of awards authorized under this index.
- For the Main Street Small Business Program – The maximum number of awards per each county was indexed by the per capita number of small businesses. Philadelphia and Delaware Counties both received the maximum number of awards authorized under this index as well.
To those who were awarded funding under this first round, I’m sure this funding is a Godsend to you and your families. To those who did not, I want to be clear: Access to this funding is not guaranteed. There is no way to ensure that the vast needs of small businesses in our community are met by this or any other one source of funds. What I can promise is that each and every grant awarded under these unprecedented programs were made fairly and equitably. Not only that, but the CDFIs went to great lengths to ensure that applications were submitted by legitimate small business owners.
It’s clear that additional funding is necessary for this program, and I will continue working with my colleagues in Harrisburg and Washington, DC to secure those funds. The last five or so months have not been easy on anyone, and I am acutely aware of the peril facing small business owners in our neighborhoods.
If you have any additional questions or concerns, please call my office at 215-492-2980. Thank you.