Kansas City had $500K in COVID-19 help for businesses. Barely half has been given out
Nearly six weeks after the program launched and more than two months after City Council members signed off, almost half of the $500,000 Kansas City set aside to help small businesses hurt by the coronavirus still hasn’t been distributed.
Kansas City Mayor Quinton Lucas announced the plan in late March for a loan fund for businesses — to be administered by local lender Alt-Cap. The City Council soon voted 12-1 to authorize the funds.
The City Council then voted to instead grant the contract to the Economic Development Corp. of Kansas City. The program hit a snag when the city and the agency struggled to negotiate a contract.
It launched May 1. As of June 10, the most recent data available shows that 19 businesses had received $271,000. Board chair Terry Riley said the agency is hoping to distribute the remaining funds quickly in the coming weeks. He said they have been following the criteria set out by the council.
“In a perfect world, it would have been good just to get all the money out in one week, but there is a process,” Riley said.
The EDC has received 105 applications for the loans, and 47 have withdrawn or been rejected. Some did not meet eligibility requirements, Riley said — they were outside Kansas City or based out of owners’ homes or couldn’t provide the necessary paperwork.
The other 58 moved on to the next round, and 19 have provided the documents to get approved. All 19 have received the funds.
“There are businesses who are not even treading water right now,” Councilman Eric Bunch said earlier this month. “I would have liked to have seen much more progress on this, and I think it’s disappointing that we haven’t seen more.”
Lucas said that “with no additional staff resources, EDC is doing a good job administering a program created six weeks ago.”
“I know we will continue throughout the year to distribute more funds to small businesses in Kansas City.”
Though he voted against offering the contract to EDC, Lucas didn’t address whether he was satisfied with its performance compared with how he thought Alt-Cap might have done.
Councilman Lee Barnes, who sits on the EDC’s board and offered the amendment to grant the agency the contract, said he “really would hope” that the rest of the money would be distributed in the coming few weeks.
“I thought … at this point we would have pretty much 90% of it out, but I don’t know what may have been some of the lags in the process or what have you.”
Bunch likened granting the contract to EDC to changing horses midstream. He called it a “political move” and said it frustrated him.
But Barnes said that in early conversations among city officials — before Lucas introduced the legislation — the contract was expected to go to the EDC.
Riley said after the initial surge in applications, the agency had seen a decline in businesses seeking funds. The agency, he said, will “relaunch” and is advertising on social media and newspapers in the hopes of getting more interest.
“If we do this relaunch and just use all of our collective resources, I’m pretty sure this money can be gone in a couple weeks,” Riley said.
To receive the funds, businesses must be located in Kansas City. They must be deemed nonessential and/or hit hard by the pandemic. They must have fewer than 20 employees and less than $750,000 in annual revenue and provide income and identity verification. Home-based businesses are not eligible.
Interested business owners can apply at edckc.com or on paper at the EDC’s River Market office.
T’Risa McCord, interim president and CEO of the EDC, said the agency was ready for more applications.
“We love our small small businesses in KC and we know that these funds really have a big impact. We can help, so we want to encourage them to apply.“
