Lack of demand for small-business grant program creates questions about outreach, effectiveness

JUST OVER 15% of eligible city businesses have started an application for a new $2,500-apiece grant program that launched in October, prompting questions about its effectiveness. / PBN FILE PHOTO/CHRIS BERGENHEIM

PROVIDENCE – If every little bit helps for suffering small businesses, you’d think $2,500 would have companies lining up in droves.

But in the three months since Providence launched its COVID-19 Small Business Grant Program, just over 15% of the estimated 2,700 eligible businesses have started an application, according to data shared by Andrew Grande, city spokesman. Even fewer – about 12% – have actually submitted their requests for the $2,500-apiece grants, with $517,500 doled out to the 207 approved recipients as of Jan. 10, according to Grande.

That leaves just under $6.5 million of the program money, funded as part of an initial $42 million tranche of the city’s American Rescue Plan Act dollars, still up for grabs, with about 2,300 eligible businesses yet to apply.

So what gives?

- Advertisement -

City Council President John J. Igliozzi was unaware of how many eligible businesses had not applied before talking to Providence Business News. He said the program still needs time to “roll out,” but added that if there were obstacles preventing eligible businesses from applying, he wanted to fix them.

It doesn’t make sense,” Igliozzi said. “If you’re eligible, why would you not apply? There’s some kind of disconnect we need to drill down on.”

One possible reason: they don’t know there’s money out there.

Grande in a statement described the city’s ongoing outreach efforts, which included letters mailed to all eligible businesses when the program was announced, as well as follow-up through door-to-door “business walks” in key commercial corridors, radio announcements, email newsletters and social media posts, many in English and Spanish.

But the message may still not be getting through. 

Marc Streisand, owner of Marc Allen Fine Clothiers, said he only knew about the grants thanks to his participation in the Northern Rhode Island Chamber of Commerce. He doubted other small-business owners were aware, given the flood of news and information already inundating their physical and virtual mailboxes.

“Other than a traffic ticket for going through a red light, are you going to open every single piece of mail you get?” Allen said.

Chris Parisi, owner of Providence-based Trailblaze Marketing and co-founder of the RI Small Business Coalition, also said there should be more communication about the program, suggesting the city partner with other business organizations that may be better able to reach their members. 

Of the estimated 1,500 member businesses of the coalition, Parisi estimated only a “handful” had applied. Whether that was due to lack of awareness or other reasons – Parisi previously said the $5,000 tangible tax minimum was too restrictive – was unclear.

Streisand, who applied for and received a $2,500 grant soon after the program launched in October, also said fellow business owners may be wary of the seemingly “free” money after being burned by Gov. Daniel J. McKee’s about-face on taxing Paycheck Protection Program loans.

“To get $2,500 and find out later I have to pay $600 in taxes on it, that may not be worth it,” Streisand said. “I applied because I need the money so bad, and I am hopeful I will make up for it later as things improve.”

The city will follow Internal Revenue Service guidelines on use of federal stimulus funds, which generally state that grant programs will be taxed as part of businesses’ gross income, according to Grande.

At this point, the city has no plans to change the program requirements nor its outreach campaign, though efforts to let businesses know and help them apply will continue, Grande said.

Nancy Lavin is a PBN staff writer. You may reach her at

No posts to display