How Cities and States Are Stepping up to Help Small Businesses in Crisis (Episode 101)

Date: 28 May 2020 | posted in: Building Local Power, Retail | 0 Facebooktwitterredditmail

On this episode of Building Local Power, host Jess Del Fiacco talks with Kennedy Smith, Senior Researcher with ILSR’s Independent Business initiative. Kennedy has been closely tracking what’s happening at the state and local level to support small businesses affected by the pandemic. She shares examples from all over the country of how communities are acting fast to create and implement much-needed solutions.

Kennedy and Jess discuss:

  • Some of the differences between local and federal small business programs, and how local successes might be able to inform future federal policy.
  • The unique solutions and creative partnerships we are seeing at the local level.
  • How small businesses are adapting as states re-open, and what their long-term needs look like.

 

“And that’s one great takeaway from all of these programs is how they really are tailored to the specific needs of a place and are making sure that businesses that might be underserved otherwise are getting their needs met.”

 

Jess Del Fiacco: Hello, and welcome to Building Local Power, a podcast dedicated to thought provoking conversations about how we can challenge corporate monopolies and expand the power of people to shape their own future. I’m Jess Del Fiacco, the host of Building Local Power and the Communications Manager here at the Institute for Local Self Reliance. For 45 years, ILSR has worked to build thriving, equitable communities where power, wealth, and accountability remain in local hands. For today’s show, I’m joined by one of my colleagues, Kennedy Smith. Welcome to the show, Kennedy.
Kennedy Smith: Thanks, Jess.
Jess Del Fiacco: We’re happy to have you on, and this is your first time on the show. So before we get to our conversation, which will be about state and local programs to support small businesses, do you want to just tell us a little bit about your background and what your focus is at ILSR?
Kennedy Smith: Sure. I started out as an architect, actually, but quickly turned away from that and got involved in downtown revitalization, which led me to a lot of work in small business development. I was the director of the National Main Street Center for 14 years, had a consulting firm doing downtown economic development work for 15 years, and I’ve been a collaborator with ILSR over the years in those different roles, so it was a natural fit to join the ILSR team, focusing on, again, small business development issues. I started on March 3rd. Emergency was declared.
Jess Del Fiacco: Baptism by fire, huh?
Kennedy Smith: Yes, just days after that. And so it’s been sort of small business relief 24/7.
Jess Del Fiacco: And one of the things that you’ve done is put together that great list of state and local programs that we have up on our website, that we’ll definitely link to in this post. So I am one of, I think, many people who are overwhelmed by the amount of COVID coverage out there. So could you catch us up on what’s happening right now at the state and local level with programs to support small businesses?
Kennedy Smith: Sure. There’s a lot happening, is the short answer. And communities have sort of come into this at a couple of different points. Initially, there was just a lot of concern about keeping businesses alive, especially those that had to be closed by a governor’s order or national order. Restaurants, retail businesses, things like that that had to close their doors. So there was an injection of cash from communities who scrambled and found money everywhere, private contributions, appropriations that had been made for other projects in the community that everybody agreed immediately had to be rerouted into small businesses.
Kennedy Smith: And now that sort of that first wave of funding has happened and some business stabilization happened, now communities are beginning to look a little more deeply into, okay, so how can we really help businesses pivot and survive once they begin to reopen? And so they’re starting to look at more specialized types of funding and thinking about those longterm needs, but in the process of all of this, they’re developing really fascinating partnerships. Organizations are coming together in ways that I’ve never seen happen before and really making some wonderful decisions about what’s important in their community and how to make that happen.
Jess Del Fiacco: Yeah, that’s great. And one of my questions was actually, we can kind of combine it with this next one, which is A, what are some of the differences between the federal and local small business programs we’re seeing? And B, I was just wondering if by nature of them being local, if those programs are a lot more accessible for small businesses than the federal programs?
Kennedy Smith: Yeah. Well, the federal programs, I mean, everyone’s heard sort of the nightmares of the Paycheck Protection Program and how difficult it’s been for businesses to get access to those, especially small businesses. Some of the larger businesses have been able to get funding pretty quickly. The smaller ones have struggled. And that is one of the reasons why I think these local programs are so much more successful, is because they’re completely locally generated and people are getting money out the door to small businesses within a couple of days to a week. So it’s very responsive and also very tailored.
Kennedy Smith: So in communities that have large number of businesses that cater to tourists, they might have one kind of funding available, and those that have a lot of small manufacturers, there are programs that target those kinds of businesses. So very responsive and very fast.
Jess Del Fiacco: So what are some of the unique things we’re seeing on the local level?
Kennedy Smith: Several things. I would say one is that communities are making this happen, even if they just have a tiny bit of money. So communities don’t seem to be letting lack of resources stop them from trying to make something happen. There are communities that are offering programs that are completely crowdfunded. One example I came across was a school teacher in California, who, because her town had like no money for anything, she started a crowdfunding thing herself with a fireman and a couple of other people in the community. And they raised all this money for small businesses. So it’s at all scales, all scope, all sort of needs.
Kennedy Smith: Some examples that I’ve come across that I think are kind of fun and interesting are in Arkansas, the Startup Junkie Foundation partnered with Kiva to offer interest-free loans of up to $10,000 to small businesses in Benton and Washington counties. Emporia, Kansas had four organizations come together, the Emporia Community Foundation, Emporia Main Street Program, a local radio station, KVOE, and the United Way of the Flint Hills. And they kind of formed together a committee when this all started, to think what are the community’s needs going to be? And they realized in the process of that, that their community didn’t have any sort of emergency response function, and they decided that they should sort of become that.
Kennedy Smith: And so they each chipped in some money, they also got some contributions from the public, and are offering grants to small businesses through the Emporia Main Street Program. Their team meets every Tuesday to review applications on a rolling basis, and they announce the grants on Wednesday. So decisions are made really, really fast. The Emporia Community Foundation manages the donations and writes a check to the Emporia Main Street Program, which then distributes the money directly to businesses. So within 24 hours of the loan application being reviewed, the grant application, a business has money. The radio station carries the announcements live of what the new grantees are, which generates buzz for the program and attracts new donations, so it’s kind of been a self-sustaining process there.
Kennedy Smith: And they also are sort of doing some triage. They realized that there were some businesses that weren’t in great shape anyway. The owners might have been getting older and thinking about an exit strategy. And so it’s painful for them to talk about, but they’re thinking about, yeah, this younger business probably can use the cash better than this one that has a bunch of dead flies in their storefront window and isn’t really putting much energy into the business anyway. I’ve heard a few other people in the process of exploring these programs use the phrase, “We don’t want to water the weeds.” So kind of a sad reality that we’re probably going to lose some underperforming businesses in the course of this.
Jess Del Fiacco: It’s still just incredible to me that not only did they put this all together, I mean, all this collaboration happened in such a short amount of time, but it happened without people being able to say, like, call a community meeting down at the town hall.
Kennedy Smith: Yeah. I know. It’s all happening by Zoom and telephone. It’s crazy. Some really wonderfully specialized programs, Iowa has a program called the Iowa Targeted Small Business Sole Operator Fund that gives grants of $10,000 to businesses that have no employees. It’s just the owner himself or herself. I came across an African American hairstylist in Detroit who launched a fund called the Beauty Professionals of Color Relief Fund, and using the hashtag #givetheusual, she’s encouraging people who can’t go to their hairstylists now to nonetheless contribute to that foundation that she’s created the amount they would usually pay for a haircut or hair treatment, and is raising money to give to people who are not able to do hairstyling right now.
Kennedy Smith: Michigan Women’s Forward has put together a $1.5 million resilience fund for diverse entrepreneurs and small businesses from underrepresented groups in Michigan to reopen or pivot their businesses. That’s something that we’ve hoped that Congress would do, that it would be more actively funneling money to underrepresented businesses and businesses in economically distressed areas. And it hasn’t really been able to do that, but again, sort of on the community and state level, it’s much easier to make that happen. And that’s one great takeaway from all of these programs is how they really are tailored to the specific needs of a place and are making sure that businesses that might be underserved otherwise are getting their needs met.
Jess Del Fiacco: I think we can just take a brief break here so I can take a minute to thank everyone for tuning into this episode of Building Local Power. If you enjoy listening to our show, if you share in our vision of thriving, equitable communities, we hope you’ll consider making a donation to the Institute for Local Self Reliance. Not only does your support underwrite this podcast, but it also helps us produce invaluable research, like the work you’ve heard Kennedy discuss today. Please take a minute and go to ilsr.org/donate. Any amount is sincerely appreciated.
Jess Del Fiacco: So you’ve been speaking directly to a lot of these small business owners, correct?
Kennedy Smith: I’ve been speaking to the people who are administering these funds.
Jess Del Fiacco: Programs.
Kennedy Smith: Yeah, right, who are a wide range of people. They could be a banker. They could be somebody from a community foundation. It’s just all over the board.
Jess Del Fiacco: But I’m sure you have a sense of what these businesses need right now, especially that I think every state is reopening at least in some capacity, how they plan to adapt and what they need to do that.
Kennedy Smith: Yeah. I mean, one of the greatest needs, of course, is learning how to be an omnichannel business all of a sudden. For years and years and years, I’ve been talking to business owners about the importance of being able to offer a buying online, picking up curbside, which is called BOPUS, and some have done it, some haven’t. But all of a sudden, it seemed like in two weeks, every small business in the U.S. learned how to do that, learned how to let people order by phone or buy online or something and pick up an order curbside. And that’s accelerating, and so I think that there’s much more of a need now, as stores are beginning to open again, to pump money into that.
Kennedy Smith: And there are a number of programs I’ve come across that are providing funding specifically for online storefronts, for reconfiguring stores so that they’re more of a marketing and fulfillment center than they are a place that people can browse in. And also, some money now going to bulk purchases for downtowns of things, like restaurant furniture for outdoor dining, sidewalk signs, new barriers and things that can block off pedestrian spaces in the districts. So communities are beginning to shift their funding attention that way now to help businesses pivot.
Jess Del Fiacco: And I’m sure there’s some local policy decisions there, too. I mean, I’m just thinking about the expansion of outdoor dining. In some cases, maybe we’ll see parts of streets closed off or sidewalks, right?
Kennedy Smith: Yep. That’s going to become very commonplace, and it’s happening very quickly. And I’m also finding that sort of a byproduct of all of this is a new level of trust between local government and the business community, because I’ve talked to some people who are saying, in local government, I’m just overwhelmed. We’re trying to administer these loans and grants, and we have all the health concerns, and we’re concerned about our first responders. We don’t have time to think about the zoning implications of what it means to suddenly turn a former vehicular traffic lane into a lane of dining, outdoor dining. So business community, get together and think about what it is that you need and want, and bring it to us and we’ll do it. And so it’s happening very quickly with this nice level of collaboration that hasn’t been there before.
Jess Del Fiacco: Looking at the longer term, do you have a sense on how we will measure the successes of these programs and adjust as things change? I mean, other than just saying, we’re seeing a lot of businesses go out of business, are there other things that we’re tracking and paying attention to, that ILSR is paying attention to, and that these programs are kind of using to judge how things are working?
Kennedy Smith: I would probably maybe spin that a little bit differently, and I would say there are some things that we’re learning through this process of looking at what community needs are, what business needs are, and how communities are responding to them, both in the public and private sector realms. We’re finding some sort of systemic problems that have been there for a long time. One of the things that emerged pretty early is so you have a downtown clothing store that has to close all of a sudden because of the governor’s executive order. So they’re closed, but someone can still go to a Walmart to buy groceries and buy clothes while they’re there, and toys, and books, and hardware, and all the things that all the other small businesses can’t do all of a sudden. That’s a real problem from a market access perspective.
Kennedy Smith: And so communities caught on to that and they’re like, wait a second. This is wrong. And so many of the loan and grant programs that I’ve come across are specifically for businesses that have had to close completely because of this to sort of make up for some of the inequity built into that system. We’ve certainly seen emerging, sort of loud and center, the need for greater capital resources for unbanked and underbanked communities and entrepreneurs. And I think that that’s going to be one of the lasting impacts of this, but positive impacts, is that we’re going to fill those gaps. Communities are beginning to fill those gaps and be aware of them. Interesting and important lessons emerging from this that I think are going to hopefully make our communities better places in the future.
Kennedy Smith: There’s also some interesting collaboration between businesses happening as communities begin to think about opening up streets for dining. What we’re finding happening is that, so you have a restaurant and it’s next to, say, a bookstore, and the bookstore is doing business through curbside pickups or local deliveries or something. The restaurant needs more space to expand outside. So we’re finding neighboring businesses developing these collaborative partnerships, where it’s like, “Hey, let me put more tables out in the street in front of your bookstore. And since we now have all this space between tables, you can put racks of books between the tables and people can browse the books while they’re eating and buy them.” And so we’re finding all those kinds of things happening out of this. Just a fascinating time to be watching what’s happening with businesses and communities’ responses to their needs.
Jess Del Fiacco: Yeah, that’s really interesting. Is there anything else that you wanted to talk about?
Kennedy Smith: One thing I would say is that the demand is far outstripping the amount of money that’s available, even at the local level. Bexar County, Texas had a $5 million, $5.25 million fund for loans and grants for small businesses that opened on March 23rd. They had more than 150 applications in their first eight hours. They had 650 by the end of the first week, totaling $42 million in needs, so eight times the amount of money that they had. Loudoun County, Virginia, same thing. They received 1200 applications for a $1.4 million grant fund, but they could only support 201 businesses with it.
Kennedy Smith: Some places are going back when they find out how much demand there is, and sort of patching in the holes. Pendleton, Oregon, the Pendleton Development Corporation had a Relief in Hospitality relief program, retail and hospitality relief program, making $2,000 grants to each of 50 small businesses. And they thought that if they had more than 50 small businesses, they would choose the ones who got grants by lottery. Well, they got a lot more demand, and so they said, wait a minute, we can’t choose by lottery. Let’s just go raise more money so that everybody can get a grant. So all 70 businesses got a $2,000 grant. That’s something that the federal government obviously isn’t in a position to do, and even the state government isn’t, but at the local, micro level, you can really make it happen and make the right kind of fund work for the community.
Jess Del Fiacco: That’s great, Kennedy. It’s just fascinating to hear about these different programs popping up everywhere. I mean, it’s obviously sad that they have to do this kind of innovation right now, but as you said, there is a hope and potential for really interesting solutions that will solve problems that existed long before the coronavirus hit us.
Kennedy Smith: Yeah, no, that’s true. I mean, I think it’s really put a tight focus on what communities can do themselves to be self sufficient and how they really are more effective at it than the federal government is.
Jess Del Fiacco: And my last question, which is just kind of for fun, sometimes we ask people for reading recommendations, but I’ve kind of expanded that to say what are you reading, or watching, or doing anything that’s keeping you going during lockdown?
Kennedy Smith: Oh gosh. Well, it’s a happy coincidence that it is also sort of getting your garden season going. So I’ve been doing a lot of work in my vegetable garden in the backyard. I made the mistake of reading Hugh Howey’s WOOL series, the books WOOL, which were these wonderful self-published, crowdfunded books, but they’re about this post apocalyptic, dystopian world. And it’s not the thing to read during a pandemic. So I’m trying to switch my reading habits to something gentler.
Jess Del Fiacco: Right. I’ve been reading a lot of Edith Wharton novels. It’s great escapism, because it’s all about navigating these tricky, kind of insane social situations, giant dinner parties, the opera, whatever. Wow, I can’t imagine a time when I’ll eat dinner with a group of people again, but it’s nice to think about.
Kennedy Smith: It’s fun to read about it. Yeah. Yeah, no, I’ve found in choosing TV shows and movies to watch that I’ve been going for the really feel good stuff. I’ve watched Sense and Sensibility again, and Galaxy Quest. I’m going for the things that make me feel nice and happy.
Jess Del Fiacco: All the comfort food.
Kennedy Smith: That’s right. The comfort food movies.
Jess Del Fiacco: Okay. Well, thank you, Kennedy for joining me today. This was a great conversation, and I’ll talk to you again soon.
Kennedy Smith: Okay. Thanks.
Jess Del Fiacco: Thank you for tuning in to this episode of the Building Local Power Podcast from the Institute for Local Self Reliance. You can find links to what we discussed today by going to ilsr.org and clicking on the show page for this episode. That’s ilsr.org. While you’re there, you can sign up for one of our many newsletters and connect with us on social media. Finally, you can help us out with a gift that helps produce this very podcast and supports the research and resources we make available for free on our website.
Jess Del Fiacco: You can also help us out by rating this podcast and sharing it with your friends on Apple podcasts or wherever you find your podcasts. This show is produced by Zach Freed, Sushmita Shrestha, and me, Jess Del Fiacco. Our theme music is Funk Interlude by Dysfunction_AL. For the Institute for Local Self Reliance, I’m Jess Del Fiacco, and I hope you’ll join us again in two weeks for the next episode of Building Local Power.

 

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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.

Photo Credit: iStock.com/halbergman

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Jess Del Fiacco
Follow Jess Del Fiacco:
Jess Del Fiacco

Jessica Del Fiacco is the Institute for Local Self-Reliance’s Communications Manager. She works closely with all of our initiatives to build community power and combat monopolies, and she runs ILSR’s social media networks on Facebook, LinkedIn, and Twitter. Jessica also produces the Institute’s Building Local Power podcast. Contact Jessica for media inquiries.

Follow Kennedy Smith:
Kennedy Smith

Kennedy Smith is a Senior Researcher for the Institute for Local Self-Reliance's Independent Business Initiative. Her work focuses on analyzing the factors threatening independent businesses and developing policy and programmatic tools that communities can use to address these issues and build thriving, equitable local economies.

Jess Del Fiacco
Follow Jess Del Fiacco:
Jessica Del Fiacco is the Institute for Local Self-Reliance’s Communications Manager. She works closely with all of our initiatives to build community power and combat monopolies, and she runs ILSR’s social media networks on Facebook, LinkedIn, and Twitter. Jessica also produces the Institute’s Building Local Power podcast. Contact Jessica for media inquiries.