The $2.3 million initiative will issue $5,000 grants to help businesses offset costs associated with the ongoing pandemic.
Small businesses in the city of Sarasota will soon be able to apply for a city program issuing $5,000 grants to help address financial challenges associated with COVID-19.
In a unanimous vote Monday, the City Commission agreed to dedicate $2.3 million in economic development funds to the grant program. Although there was debate among the commission regarding the ideal eligibility criteria, there was broad consensus about the need to take quick action to assist struggling businesses.
“I’m hoping this may the difference between people being able to reopen their business or not,” Commissioner Liz Alpert said.
To be eligible for the grants, which do not need to be repaid, businesses must have 25 or fewer employees and be located within city limits, among other criteria. Eligible businesses include restaurants, bars, retail stores, personal services including hair stylists, child care operators, fitness centers and event spaces. Professional services, such as lawyers and accountants, are excluded.
Businesses that have received money from the federal Paycheck Protection Program or Economic Injury Disaster Loan program will not be able to access the city grants. Businesses that have received money from the county’s Small Business Resiliency Loan program will be eligible for the city grants, but businesses that have not gotten county money will be given first priority in the city program.
City Manager Tom Barwin said staff will immediately begin finalizing an application process. Before the grants can be issued, the commission must approve a budget amendment authorizing the allocation of the funds at a May 12 meeting.
To support the program, $1.35 million will come from the city’s economic development fund. Another $724,000 will come from tax-increment financing revenue from the Newtown Community Redevelopment Area, and a final $210,609 will come from TIF funds in the downtown Community Redevelopment Area. The TIF funds will be reserved for businesses within the boundaries of each respective redevelopment area.
It took less than one day for the county’s Small Business Resiliency Loan program to receive enough applications to use up the entire $4.3 million budget the county had dedicated.
The Economic Development Corporation of Sarasota County, which is running the loan program in partnership with the county, opened the application system at 9 a.m. April 27. Eight hours later, 368 businesses had filed applications for up to $25,000 in low-interest loans.
Out of those applications, David Bullock, interim CEO of the EDC, anticipates the county and EDC will likely end up issuing about 200 loans. Bullock said the EDC has already transmitted $4 million worth of loan requests to the county for processing. About 75% of the applicants sought the maximum $25,000 loan the county authorized in April.
The loans require no payments and are interest-free for the first year. If 80% of the loan is paid back within a year, the final 20% will convert into a grant. After the first year, businesses have three years to pay back the loan at 3.5% interest.
Bullock said the EDC relied on several partners to run the program. He credited employees at Perform[cb] and Dealers United for helping set up the application system and ensuring the website could handle the sudden increase in volume. Banking professionals guided them through the process of issuing loans. Workers from local chambers of commerce, S-One Holdings Corp. and Kerkering Barberio helped the EDC take in applications once the system went live.
“It was truly a community response to a need,” Bullock said.
Although Bullock was happy the county and EDC were working to help local small businesses, he also said the need for economic assistance goes far beyond the capacity of the loan program.
“Almost every single one of these businesses has either been shut down or has been operating in a significant reduction in their activity, and many of their expenses continue,” Bullock said. “Clearly — not just here but nationwide — the economic hardship is significant.”
This article has been updated to include information about the county Small Business Resiliency Loan program.