Connecting state and local government leaders
The Small Business Administration will provide a total of $100 million to eligible organizations, including state and local governments, to assist underserved businesses.
Recovery is still a long way off for businesses that closed or lost significant revenues during the coronavirus pandemic.
That’s where a new Small Business Administration grant program aims to help, by offering grants that can be used to provide technical assistance and counseling to businesses as they emerge from pandemic-induced financial hardship.
State and local governments are among the entities eligible to apply for the SBA’s Community Navigator Pilot program, which will offer $100 million in grants to agencies that develop a system to deliver services to underserved small businesses. The program offers eligible organizations, including governments, grants from $1 million to $5 million.
Despite the amount of federal aid made available to small businesses through the Paycheck Protection Program and other targeted coronavirus relief, many businesses could use help in the form of advice and support to navigate the post-covid economy, said Bruce Strong, the state director of the Minnesota Small Business Development Center Network.
About 217,000 PPP loans were issued to businesses in Minnesota, but that’s out of some 526,000 small businesses in the state—meaning many were left out of the process and may still be suffering significant hardship.
“There are a lot of businesses that need help in terms of how to recover from the covid situation,” Strong said. “There is still a lot of technical assistance that can be provided to these businesses.”
For businesses that did receive PPP or other funding, a navigator program could help business owners ensure they use and document use of the funds properly, he said.
The SBA program relies on a hub-and-spoke approach that enables a traditional business assistance organization to enlist partners in specific sectors of underserved entrepreneurial communities.
“These networks leverage the business development expertise of the central hub organization and the community credibility of spoke organizations to better connect business owners in targeted communities with critical services and assistance programs,” according to the SBA.
This type of approach is critical to reaching minority-owned businesses, which have historically not had access to the same level of support, said Gary Cunningham, the president and CEO of Prosperity Now, a nonprofit that works to expand economic opportunities for low-income families and communities.
Because the grants range from $1 million to $5 million, no more than 100 grants could be awarded. Organizations have until July 12 to submit applications and the SBA expects to announce grant awards in August.
Strong said his organization is working with Minnesota’s Department of Employment and Economic Development to identify the best partners and approach to applying for a navigator grant.
Even if state and local governments do not apply for the grants, they can play a role in helping to evaluate the systems in place to drive economic development and support businesses in their communities, Cunningham said.
“Cities and local governments should be calling together the players in their ecosystems to see how this is working,” Cunningham said. “They can take a leadership role in pulling people together.”
While local governments may have agencies that work on economic development, they may not have worked directly on business development, specifically with minority business communities, whose needs may be different, Cunningham said. In those instances, local governments would be best served by reaching out to community organizations that are working with minority entrepreneurs to understand their needs.
“If this program is going to work, it has to tap into those groups that already work in the community,” he said.
Andrea Noble is a staff correspondent with Route Fifty.