By Candice Richardson, The Seattle Medium
Since the Coronavirus pandemic took our world by storm, trillions of dollars in response and relief funding have been disbursed by the federal government in an attempt to curb the ravages of the disease, address gaps in health care, prevent an unprecedented wave of homelessness, as well as save and rebalance the economy.
That federal funding has largely come in two waves: the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 and the America Rescue Plan Act (ARPA) of 2021 which generated approximately $2.59 trillion and $1.9 trillion, respectively, according to the Treasury Department’s Data Lab on U.S. Spending and the National Conference of State Legislatures.
In last two years, nearly $11 Billion of that funding landed in Washington State with $3.9 billion allocated to Economic Support — which includes everything from unemployment insurance to rental assistance to small business grants and more. Other areas of focus for spending includes Health Care, which has received $1.9 billion and covers things like COVID-19 testing and tracing; school support, which received $1.7 billion; transportation which received $1 billion; and child care and children’s services which received over $890 million in federal funding. Approximately one billion additional dollars was spent on state and local government operations, food assistance, and long-term care, collectively.
State relief funds pass through a variety of government agencies and non-profit organizations in order to directly impact people on the ground. The majority of the economic support funds have been facilitated by the Washington State Department of Commerce and city governments working with organizations such as ArtsWA and United Way of King County to allocate funds for a variety of needs.
“One important thing to note is that there are many moving parts, so to speak, with CARES Act dollars,” stated Penny Thomas, Media Relations Manager for the Department of Commerce. “Commerce not only administered funding directly from the state level for small businesses and non-profits, but also passed through flexible funding to local governments, such as King County, that they then determined how to use. Many jurisdictions used some of their local funding for small business assistance programs.”
Small business assistant programs seem to be a central focus in economic recovery efforts due to the multiple programs benefiting small business at the state, county, and city levels. In addition to funding set aside to support local chambers, provide technical assistance and serve niche industries such as farmers markets and shellfish growers, small business grants and loans have consistently taken in applications since funding was first made available in April of 2020.
A $30 million foundational investment in the Small Business Flex Fund, which receives both public and private funding sources, was created to provide low-interest recovery loans to small businesses – particularly in communities where banking relationships are lacking; and the Working Washington Emergency Small Business Grant (WWESBG), also referred to as the Working Washington Small Business Grant, has disbursed approximately $357 million in grant dollars over four rounds to small businesses throughout the state.
The first two rounds of the WWESBG included a total of $20 million — $10 million in each round — which allocated $10,000 each to a total of 3,084 business. The award amounts were increased in rounds three and four to $12,500 and supported an estimated 7,931 businesses in round 3 from a total funded amount of $100 million, and grants up to $30,000 to 11,727 businesses in round 4 from a total funded amount of $237 million, respectively. A fifth round of funding of approximately $50 million is currently being developed to launch after the 2022 legislative session, according to the Department of Commerce website.
Approximately half of the total amount awarded by the WWESBG ($148 million) was distributed to businesses in King County with accommodation and food services/hospitality businesses receiving the 45% of the total – this is a testament to the efforts to save the restaurant and hotel industry which continues to struggle to survive post-pandemic. In comparison, businesses categorized as “other services”, excluding public administration, received 10.14% of grant funds and retail trade which received approximately 9% rounded out the top three industries supported by the funding.
According to the Seattle Metropolitan Chamber of Commerce, which acts as a conduit between the Department of Commerce and grant recipients in King County, a small business survey by the Federal Reserve system found that declines in revenue by small business between 2019 and 2020 were most severe for businesses owned by people of color. The survey found that 75% of Asian-owned business and 74% of Black-owned businesses had trouble covering operating expenses compared to 63% of white-owned businesses.
These statistics are in line with other data points showing discrepancies in the Black community, including the fact that only 43% of Black-owned businesses received the full amount of the Paycheck Protection Program (PPP) forgivable loan they applied for compared to 79% of white-owned businesses. Additionally, a report from Prosperity Now found that the average value of a white-owned business ($791,434) is nine times the value of a Black-owned business ($87,379) in King County.
In an effort to address such discrepancies and ensure that a significant number of minority businesses were included in the pool of applicants for funding, The Seattle Metropolitan Chamber of Commerce relied on strategic partnerships with multiple organizations to increase their outreach efforts to under-served communities.
“We knew from the data that BIPOC-owned businesses were hit particularly hard during the pandemic and so we wanted to make sure we were doing outreach on our end so that the folks, who were most affected, were aware of this opportunity,” said Alicia Teel, Senior Vice President of Public Affairs and Communications for the Seattle Metropolitan Chamber of Commerce.
“We took on a lot of partnerships to assist with marketing the grant [in] making sure that folks throughout the county understood that they were eligible, and so we could make sure we were reaching new audiences,” added Teel, who said that the 60 small business that received WWESBG grants that were distributed in King County during round 2 were all minority-owned.
According to Teel, this focus didn’t start with the pandemic, as the chamber had already established partnerships with organizations like the India Association of Western Washington, Seattle Chinatown International District Preservation and Development Authority, Tabor 100, Friends of Little Saigon Sister Sky, and Ventures.
Since the pandemic, the chamber has conducted programs, including working with established Certified Public Accountants (CPAs) and the Urban League of Metropolitan Seattle, to provide pro bono assistance to 72 small businesses so they could qualify for assistance. Most recently they’ve advocated for the Washington State Recovery Fund — which also marks the African Chamber of Commerce, the Filipino Chamber of Commerce of the Pacific Northwest, the Queen Anne Chamber, Seattle Latino Metropolitan Chamber of Commerce, Southside Chamber, and West Seattle Chamber — to set up a small business flex fund.
As of now, it would seem that as far as economic support goes, resources to small businesses at the state level seem to have been distributed as intended. The question still remains how businesses have been able to best utilize these funds and the impact they’ve had on the growth and/or survival of local businesses. Even as the total of grant funding has increased, so too have the number of awardees, meaning that a few businesses have received some funding to help them stay in business, while many other businesses have been forced to leverage personal resources to survive.
“I think the biggest struggle that we ran into was just the constraint of resources and just we wish we could have distributed a lot more,” added Teel. “We know that there was a lot of need in our community, a lot of folks who had poured their whole livelihood and so much time into their businesses. And so, I think that was the hardest thing for us as a grant administrator was not being able to say yes to everybody who applied.”
