Springfield Seeks More Funds To Help Small Businesses Hang On
As Congress works to replenish a financial aid program for small businesses, an assistance program in the largest city in western Massachusetts has been swamped by requests for help.
Officials in the city of Springfield’s Office of Planning and Economic Development are busy reviewing applications from small business owners seeking grants from a temporary assistance fund. There are more than 100 applications requesting a total of $1.5 million. There is just $500,000 available.
The city’s chief economic officer Tim Sheehan said the goal is to finish processing the applications and notify the business owners who have been selected to receive the $15,000 grants by the end of the week.
"I wish I could say the economic impact of this virus has leveled off, but if anything it continues to increase at an alarming speed," said Sheehan.
These will be the second cash awards the city has made in an effort to keep some of its small businesses afloat during the stay-at-home advisory and state-ordered closure of nonessential businesses. Last week, checks totaling $225,000 went out to 30 restaurants. This second round of the “Prime the Pump” program was open to small businesses of all types.
The city’s program, said Sheehan, was set up to help the business owners meet payroll expenses until a federal rescue arrived.
"It was always done with the intention there would be a larger federal package available, but as that has slowed down the need for funding from the local level has become more critical," said Sheehan.
The rescue the federal government devised is the Paycheck Protection Program – loans up to $10 million to companies with fewer than 500 workers that can be used to pay rent and salaries. Much of the loan is forgivable if the business retains its employees.
Banks in Massachusetts processed just shy of 47,000 loans totaling $10.4 billion, according to the Small Business Administration.
A survey conducted by the Massachusetts Bankers Association said lending institutions reported about 12,000 applications requesting a total of $1 billion were pending when the program ran out of money and shut down on April 16.
Congress and the Trump administration expect to replenish the program with $310 billion by the end of the week.
Springfield used federal Community Development Block Grant money to fund the Prime the Pump program. Sheehan said the city is trying to get money from the same source for a third round, but he can’t estimate when it might be available.
"We have to do a five-day public comment period before we can move the approval of the plan to HUD, and when we get approval from HUD we will be programming the money," said Sheehan.
The city of Springfield itself may soon need a financial lifeline.
As of last week, revenue was down by $2.3 million, according to city finance officials. Springfield’s largest taxpayer, the MGM casino, made on April 1st what was described as “a partial payment” toward the almost $7.8 million it owes the city.
Like many municipalities in Massachusetts, Springfield has extended for 30 days the May 1st due date for real estate taxes.
Mayor Domenic Sarno said Washington needs to rescue state and local governments.
" We're continuing to spend, continuing to do front line services and with revenue not coming in," said Sarno.
To keep enough cash available to pay for core services, Sarno ordered a freeze on hiring and nonessential spending on such things as office supplies and furniture.