The Iowa Economic Development Authority will offer “significantly more” than the $4 million originally eyed for grants to small businesses for losses related to the COVID-19 outbreak, director Debi Durham told business leaders Thursday.
Durham said she is looking to shift unused money from various IEDA accounts and other state sources to help trim a gap between the requests filed by small businesses for the one-month stopgap program and the $4 million available.
The first contracts should be mailed Tuesday, Durham said.
Durham declined to say how much more money will be offered. “It will be significantly more than we originally talked about,” Durham said in response to a question from Iowa Capital Dispatch. “We should know early next week.”
“I’m not going to put it out there now because I want to make sure I have all the data before I do that,” Durham said. She said she has a good idea how much cash would be needed to offer grants to all qualifying applicants, based on an analysis of a survey her agency sent to businesses.
She said she told Gov. Kim Reynolds how much the gap in funding is expected to be. “It’s her intention to do whatever we can to fund them all if we can,” Durham said.
Durham said she has been stunned by the stories of small businesses struggling to stay open during the health emergency.
“It is simply heart-wrenching,” said Durham, who also directs the Iowa Finance Authority. “People are afraid they are losing everything.
“In all my years in economic and community development, I have never experienced a black swan event quite like this at this scale,” said Durham, appearing on a webinar arranged by the Greater Des Moines Partnership. “Certainly this is wreaking havoc now only on our individual lives, but on our communities as well.”
Durham ran the Siouxland Chamber of Commerce for nearly 16 years before her appointment to IEDA more than nine years ago.
“It’s tough times out there,” added Jay Byers, CEO of the Greater Des Moines Partnership.
Various state departments are looking ways to help businesses quickly and with minimal paperwork, Durham said.
“Our businesses have been launched into an extraordinary new reality, a reality for which there frankly are now road maps and there’s no instruction manual on how we are to navigate this,” Durham added.
The deadline for the Small Business Relief Grants program was March 31. The grants will range from $5,000 to $25,000 and are for companies of two to 25 employees.
The response to the Small Business Relief Grant Program was so strong, IEDA has hired a private company to help process applications by the end of Friday, and through the weekend if necessary, Durham said
Durham said the program will include a “simple, two-page contract” and she hopes checks will be mailed within three days of the state getting the returned, signed contract.
Some states have opted for forgivable loans, but Durham said she didn’t want to risk businesses’ credit ratings. These are grants. “Let’s be honest. I’m not going to foreclose on a small business. We set them up as grants. We don’t have compliance on this program. We don’t have the staff. We will do as much due diligence as we can on the front end,” Durham said.
The state also has extended some deadlines for sales tax and withholding payments for small businesses.
IEDA may look at other assistance after working through how much federal aid will be available through the CARES Act, Durham said. The $4 million was intended to offer assistance in the days before Congress acted on the federal package.
A separate program that targets small businesses run by women, members of racial minorities and veterans with disabilities has drawn 2,500 applications, Durham said.
Eric Burmeister, executive director of Polk County Housing Trust Fund, asked how the state would distribute federal housing assistance.
Durham said said she just learned Iowa will get $14 million in Community Development Block Grant money and $9.5 million in Emergency Shelter Grants assistance. She said the state will be looking to help renters.
“We are still trying to figure out what kind of stipulations we are going to have on that and how creative we can be,” Durham said. “But I can tell you this. I told my team, ‘If you were creating something from scratch, what would it look like? Let’s use this time to encourage creativity and innovation.’”
Durham said she may also review deadlines for aid packages given to much larger businesses. “We are going to be making any concessions that we can make to keep people working to address the liquidity issues at these companies.