About 4,000 small businesses across the state applied for but did not receive a working capital grant
By NOAH TABORDA
Kansas Reflector
TOPEKA — Thousands of Kansas small businesses lack desperately needed support after fewer than a third of those seeking federal relief funds were awarded grants for critical pandemic costs.
Nearly 6,000 businesses applied for help, but the Kansas Department of Commerce was only able to award grants to 1,900 before the $32.5 million allotted ran out. Some members of the Strengthening People and Revitalizing Kansas, or SPARK, task force want to tap into a portion of the $75 million in unused reserves to bolster the grant program.
The small business working capital grants were available to any business with fewer than 500 employees. The goal was to help businesses pay working capital expenses, such as rent, utilities and mortgage insurance.
David Harwood, a member of the SPARK task force responsible for determining where to allocate CARES Act funding, said his wife was directly affected when grant recipients were announced last month.
“The small business my wife is employed by closed their doors two weeks ago because they were unable to get one of the small business loans,” Harwood said. “The people who are in the most need for the dollars aren’t getting it.”
Harwood and other members of Gov. Laura Kelly’s SPARK task force expressed concern for small businesses Thursday during a progress update on CARES Act funding distribution.
Bob North, of the Kansas Department of Commerce, said the small business working capital grant was greatly “oversubscribed.”
“We recognize there is a lot of unmet need out there for some of these programs,” North said. “We are not thrilled to tell 4,000 business no, but if there are additional funds over the next few weeks as pending grants process, we do have a list of those who were unsuccessful, so they are in a position to fairly rapidly work that list.”
Small business support was among the top priorities the task force identified during previous meetings for CARES Act funding allocation.
Neelima Parasker, president and CEO of SnapIT Solution in Overland Park, said given the consensus that small businesses aid is of importance, action should be taken now with reserve funds.
“I think there is a great opportunity for us to reconsider providing some of this grant money that is on our waitlist to these small businesses,” Parasker said. “When these programs opened, the demand was highest in that bucket. I want to reemphasize how we can support our small businesses.”
Julie Lorenz, executive director for the Office of Recovery, said there will be time for the State Finance Council to distribute reserve funding to small businesses as remaining funds from the first three phases of spending are awarded and paid.
Through September, about $203 million of the total $1.34 billion available to the state in CARES Act funding has been awarded and paid out. $293 million has been awarded, but not yet paid and nearly $463 million is unawarded or planned to be spent soon.
In the interest of transparency, the Office of Recovery will launch a dashboard on its website next week with information about where all CARES Act funding is going, Lorenz said.
Chuck Mageral, owner of Free State Brewing Company in Lawrence, said his business was among the 4,000 not to receive a small business grant.
“I have no doubt that we would be able to quickly meet any timeframe that has been part of this program, and that money would not come back on the state if we receive those funds,” Mageral said. “Let’s do everything we can to buttress up that small business need. We have the opportunity to do it. We just need to make it happen.”