Weeks later, why hasn’t KC delivered promised COVID-19 relief to small businesses?
In late March, the coronavirus outbreak shut down Kansas City businesses deemed nonessential.
At the behest of Mayor Quinton Lucas, the Kansas City Council approved a measure that would provide $500,000 in emergency relief funds to small businesses.
While the sum was relatively modest, the help was desperately needed. But nearly six weeks later, not one dime of the emergency fund has been spent.
While the federal government has moved far more swiftly to dole out hundreds of billions of dollars to businesses, the city has gotten off to a painfully slow start, prompting questions and complaints from City Council members who rightly expected to see action by now.
The program was initially proposed to provide loans that would help small businesses offset financial losses incurred during the COVID-19 pandemic.
The shutdown has wreaked havoc on businesses throughout Kansas City. Some have already announced they will not reopen. The urban core in particular has suffered devastating blows.
Attorney Henry Service, who owns the Historic Lincoln Building that is home to 47 black-owned businesses in the Historic 18th & Vine Jazz District, said tenants are struggling mightily under the city’s stay-at-home order.
“I would say 98% of my tenants have not paid rent (since March),” Service said.
Infighting, politics and administrative issues have delayed Kansas City’s attempt to help small businesses. Last week, the City Council finally approved a contract with the Kansas City Economic Development Corporation Loan Corp. to administer the program.
Applications were opened Thursday.
In order to qualify, businesses must have 20 or fewer employees and must have generated $750,000 or less in revenue last year. Business owners are eligible for up to $25,000 and have three years to repay the loan. Payments are deferred the first six to 12 months, and no interest will be charged for up to a year.
The fund is targeted to help small, minority-owned businesses.
“Sometimes, there is a question related to how do we give out money responsibly,” Lucas said last week. “We know we would get blown up if we start giving out loans and we are not tracking it properly. I think we are in a good spot now.”
As nonessential businesses prepare to reopen in Kansas City, many are fighting to survive. While the city had planned to award low-interest loans, officials should consider providing one-time grants for businesses that have been hardest hit by the shutdown.
Their operations were shuttered through no fault of their own, and many don’t qualify for federal relief.
Denver, Hartford, Connecticut, Raleigh, North Carolina are among cities offering emergency relief grants to small businesses.
“Grants are helpful, but we want to make sure we are helping the businesses that want to stay in business,” a spokesperson for the mayor’s office said.
A grant between $10,000 to $25,000 to a Kansas City business deemed nonessential could provide a lifeline, though.
Of course, $500,000 is a drop in the bucket amid the economic devastation caused by the coronavirus.
“It’s not even a drip compared to the needs we have in the city,” said Kim Randolph, CEO and president of the Heartland Black Chamber of Commerce.
But it’s a start. Now, with businesses teetering on the edge of permanently shutting their doors, city leaders should consider providing grants that do not need to be repaid.
And the city must ensure that the aid businesses urgently need is distributed immediately — not several weeks from now.