Funding for the Main Street Business Revitalization Initiative would be distributed in the form of grants, not loans, and on a sliding scale based on need.
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By Ashlee Green
A handful of state senators came together on May 22 to announce their call for a portion of the federal CARES Act COVID-19 Relief Package funding to be allocated to small businesses.
Senators Jay Costa, Vince Hughes, John Blake, Jim Brewster, and Pam Iovino joined Dan Betancourt of Community First Fund and Jim Burnett of West Philadelphia Financial Services Institution (WPFSI), two Community Development Financial Institutions (CDFIs) in Pennsylvania, as well as close to 40 participants in a Zoom conference call to propose a program called the Main Street Business Revitalization Initiative.
“We are here to talk about healing the damage that’s already been done,” said Senator Blake.
This initiative would allocate $425 million of the $4 billion in federal CARES Act funding received by Pennsylvania to go toward “traditional main street businesses,” and $125 million to go separately toward ”historically disadvantaged businesses” in the form of grants, not loans, according to a press release.
The state must spend or allocate its $4 billion by Dec. 31, 2020, and senators know they must act fast to secure the funds.
“The question is: Why are we waiting? The answer is: We can wait no longer,” said Senator Hughes. “Small mom-and-pop, main street, and neighborhood businesses — especially those businesses in historically disadvantaged communities who have born the financial brunt of this pandemic — need this help.”
CDFIs would be responsible for running the initiative.
In a joint statement, the CDFI Network commented: “Our CDFIs are on the frontlines of this economic crisis and are actively assisting small businesses such as barbershops, hair and nail salons, general stores, family restaurants, child care centers, bodegas, home health care services, bed and breakfasts and many others. With decades of experience, CDFIs have the knowledge, and trust of our small business communities. We are equipped to deliver critically needed capital, business guidance and mentoring to these small businesses who are the lifeblood of our communities.”
Senator Blake explained that grants would likely be provided to individual businesses on a sliding scale based on factors such as the business’ percentage revenue loss, length of time they have been closed, and how much funding they have received from other programs.
“We are here to talk about healing the damage that’s already been done,” he said.
“Some of us were governing in 2008,” Senator Brewster added, recalling the period known as the Great Recession. While the COVID-19 pandemic is different from the 2008 economic depression in that it’s a public health-related emergency, the fiscal fallout, he said, is similar. Some small businesses have such a low profit margin, Brewster said, that a week or two out of business is catastrophic for them: “The longer we wait, the bigger the problem.”
Senator Iovino agreed: “Small businesses represent nearly half of the private sector workforce in Pennsylvania – 2.5 million jobs. They are the job creators in our communities, yet they were glaringly overlooked by federal business relief programs,” she said. “What we want to make possible for them is to survive these times… and the $550 million Main Street Business Revitalization Initiative is exactly the kind of lifeline that these economic drivers need.”
In response to a question by The Northside Chronicle on what is stopping Gov. Tom Wolf from supporting this initiative, Senator Jay Costa said “nothing,” and emphasized that the governor has been focused on dealing with the pandemic.
But as more counties enter the yellow and green phases of reopening in the coming weeks, Costa pushes citizens to encourage the governor to prioritize this small business initiative, and reminds them that it is part of the greater Pennsylvania CARES Plan.