Pandemic grants up to $ 20,000 for small businesses

NEWARK – Newark will spend $ 1.5 million in federal emergency aid to provide grants to small businesses that are “unusually disadvantaged by the pandemic” in an effort to stave off more closures in the small town in East Bay.

The grants will be up to $ 20,000 per. business and can be used to pay for a variety of things, including salaries for employees, current or repaid rent or repayments on mortgages, utilities or other expenses such as advertising or supplies.

The program, called the Exceptional COVID Grant Program, will target small personal service businesses such as hairdressers and nail salons, barbers, beauticians, personal trainers, home care providers and small day care or training centers.

While previous local and federal grants helped support businesses that were hit financially due to the pandemic, city officials say these programs have been inadequate, especially for personal service businesses, which were hit hard by prolonged forced closures.

“Public health mandates shut down most personal service providers for at least six months during the pandemic,” said Anne Stedler, Newark’s economic development director, during a Nov. 18 city council meeting that approved the grant program.

While much of the business community was hurt by the pandemic, city staff reports noted that public health protocols did not affect everyone equally.

For example, while restaurants were prevented from serving customers indoors, take-away sales were allowed most months of the pandemic, “which reduced operating costs and provided revenue and customer retention,” the city’s staff reports said. But personal service companies had no money coming in during the closures.

“Their survival is in jeopardy,” Stedler said of small personal service companies. She said previous grant programs such as financial disaster loans, payroll plans, California Relief Funds and Newark CARES grants did not fully offset the loss of some companies that were forced to close for several months at a time during the pandemic.

“Furthermore, most of the COVID grant programs were not sufficiently targeted at these small micro-enterprises where the need was greatest,” Stedler said.

According to a city consultant who held sessions with more than 80 small business owners, personal service businesses are often owned and operated by people who belong to “traditionally disadvantaged” groups.

About 68% of these businesses are owned by women, about 59% of them are owned by people of Asian descent and about 12% are owned by people of Latin American descent, city reports said. On average, they have been open for a decade or more, employing about seven people each.

“It’s an incredible amount of economic generation at the small business end of the spectrum,” Stedler said.

The grant program is funded with $ 1.5 million of the city’s $ 11.8 million share of federal funds through the U.S. Rescue Planning Act. The city will spend $ 30,000 of the $ 1.5 million on hiring Michael Cohen of Spectrum Small Business Services to manage the grants, which will ensure companies fill out applications correctly and make recommendations for pricing based on a scoring system.

Cohen said during the Nov. 18 meeting that there are three levels of eligibility for companies to qualify, to help determine who receives grants and who does not. The first level includes companies that were ordered completely closed for at least six months during the pandemic.

Businesses that were not forced to close but suffered revenue losses of more than 50% in 2020 compared to 2019 ”qualify below the second level, said city reports, and the third level are companies that spent at least 10% of their annual turnover on pandemic-related security measures.

While the grants may be up to $ 20,000 each, they will not exceed 50% of a company’s annual revenue in 2019.

The grants are limited to companies with 15 or fewer employees who have an annual turnover of $ 500,000 or less. They must intend to stay in the company for at least six more months.

“Every day as a small business owner, finances are your blood source,” councilor Michael Hannon said at the council meeting. “Time is of the essence. The sooner we get the money out to small businesses, the more likely they are to survive.”

All business owners who are awarded grants will also be asked to take a four-hour workshop on financial resilience, provided free of charge by Newark.

“I love it,” Deputy Mayor Mike Bucci said of the workshop during the meeting.

“It’s so much more than just giving a grant and helping people get over the obstacle. It’s hopefully educating them in some things they did not know that will help them get down the road,” he said.

“It’s small businesses that get the economic engine running,” Mayor Al Nagy said at the meeting. “And I think it’s important that we now give back in this distress where small businesses have supported our community for so many years.”

There are interpreters available from the city to help people who do not speak English as a first language apply.

The application deadline is 6 December at 12. There is a link to an information page about the education here, and the application can be found here. Business owners who have questions or need translation assistance can email Michael Cohen at ssbsmichael@gmail.com.

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