LEXINGTON, Ky. (WTVQ) – Small businesses will be able to apply for up to $25,000 in small business grants from the city starting July 20 if the Lexington Fayette Urban Council approves the program on second reading Thursday.
The program, which is included in the city’s new budget that started July 1, has broad support among Urban Council members, even as some still have questions about oversight, transparency and what businesses might get the grants.
Council members spent almost two hours discussing the program Tuesday after hearing a presentation about how the applications would be reviewed, outreach to the minority community and accountability to the Urban Council.
Those issues and others arose during almost four hours of discussion two weeks ago.
The new $2.5 million program is meant to help businesses come back from the coronavirus shutdown. At least half the money will go to minority- and woman-owned businesses.
Applications will be made to the city and reviewed by the LexCommerce Access Loan Program committee which includes veteran financial and business experts. The existing chamber loan program has been around almost two decades and helped dozens of small businesses ranging from food trucks and car washes to funeral homes, Tyrone Tyra, the head o the program, told the members during an introductory presentation on the review process and criteria.
While the maximum grant is $25,000, the Urban Council, envisions many of the grants being in the $5,000 to $10,000 range.
The criteria for grants includes everything from costs of cleaning to overcome coronavirus mandates to buying PPEs. Payroll costs also can be included and businesses must provide evidence of employment impact and potential for renewal and growth.
Businesses must be 50 employees or less except for restaurants which can have up to 100 full-time equivalent workers.
In the end, concerns among Urban Council members boiled down to making sure true small businesses who need help get it. More than one Council member referenced numbers released Monday showing federal small business assistance dollars approved earlier this year often went to friends of congressmen or “people who already were at the table,” meaning those with financial relationships or knowledge of how to seek assistance.
“I think we will do a lot better than Congress. I am sad at what our Congress did. We need to get it, the money, out there, and do it quickly,” veteran Urban Council member Richard Maloney said.
While others agreed, they also stressed making sure the “real needy get the money,” as Vice Mayor Steve Kay put it.
“We want to make sure the money gets to the right people,” echoed Council member Chuck Ellinger II.
“We know the true intentions behind this,” Tyra said, noting the chamber and city already know of at least 100 minority companies that will or need to apply.
“Quite a few businesses will be in crisis in the next 30 to 60 days,” Tyra continued, referring to businesses where the “faucet is going to be turned back on on the bills they owe” because of loan deferments and rent abatements.
Council members Angela Evans and Jennifer Reynolds both stressed non-traditional outreach to make sure some of the smallest and hardest hit businesses that might not be on traditional economic radars know about the opportunity.
That process and outreach and accompanying transparency is important because “the public is really watching,” Evans noted.
In the end, members also worried what would happen when the $2.5 million runs out and the city still is left with applicants, something the board admitted was a likely possibility.
“We may have more applicants than we know what to do with,” Council member Jennifer Mossotti observed.
“It’s not whether we will run out of money but how quickly, it’s not a lot of money given the demand,” Kay added.
On an encouraging note, the city may soon learn whether it is receiving $3.7 million in 1- to 2-percent federal loans for further small business assistance.
The city could “come right behind the grant program” with those funds, city leaders noted.
The Council is scheduled to review the program on second reading Thursday night. Information and application information will be on city web sites and social media pages.
And already Council members are hoping for success and what it might mean for the future.
“It’s something we can continue to push out there if this is successful, ” one member said.
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