PROVIDENCE – The R.I. Commerce Corp. is establishing a small-business-assistance grant program to serve as infrastructure for distributing up to $5,000 grants to Rhode Island’s small businesses. The program has made available up to $25 million in grant funding.
The agency approved the assistance program at its meeting Monday night, and is now seeking to select a service provider or providers to facilitate the grant program process. The program would be funded by $30 million from the federal stimulus CARES Act passed in March 2020.
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The agency would administer the grant program in concert with the state’s Department of Administration.
Gov. Daniel J. McKee, who attended Monday’s meeting, has said the state’s small businesses are a priority for his administration. This program would be his first signature program aimed at targeting aid to small businesses.
Stefan Pryor, state commerce secretary, said, “The governor has set aside $30 million for this purpose for the establishment of a small business assistance grant program. Gov. McKee charged Commerce and the state’s budget officials with identifying and recapturing [federal] Cares Act dollars that had not been spent for the purpose of assisting our small businesses.”
Pryor noted that the “focus of the program, as envisioned by McKee, is to bridge the time period between now and the full establishment of new federally funded programs.” In essence, Pryor said the funding would aid small businesses until the federal stimulus funding that was passed in the American Rescue Plan arrives. Rhode Island is set to receive roughly $1.78 billion in stimulus dollars in pandemic aid from the bill.
“So, we want to ensure we build a bridge for small businesses to potential additional programming along these lines,” said Pryor. “That’s what we’re planning to utilize the $30 million for.”
Pryor said the agency would return to the board “for authorization of the program and its parameters, and other specifications. But we are ready now to explore and engage a program administrator or administrators for the program – so we can hit the ground running when we have the full program designed for this bridge program.”
The agency has issued a request for proposals for a program administrator or administrators. The due date for proposals is Wednesday. The agency would negotiate a contract with potential administrators.
The program cost is yet to be determined, and will be discussed at a future meeting of the board.
Various board members expressed concerns regarding the selection of an administrator, how businesses would be selected and how the funding would be distributed.
Bernard Buonanno, an agency board member, called the program “a political minefield. I’m concerned regarding how to avoid the politics of who gets [the funding], and to make sure it’s distributed in a way that is equitable to different types of businesses.”
“Whatever you are going to do to distribute this money just assume it’s going to get a lot of public scrutiny,” said Buonanno. “So, it’s got to be fairly distributed. I have no problem with the proposal, but I am concerned about the execution. I’m not pointing fingers at anyone. It’s just a complicated thing to execute.”
“Everything you have said, is right,” said Pryor. “McKee has articulated a point of view on this program that is similar – aiming at small dollar amounts across a broad array of impacted industries.”
Board member Karl Wadensten expressed concern and caution with potential engagement of an out-of-state firm as a program administrator. He cited the Community Reinvestment Fund, USA, which administered the Restore Rhode Island Small Business grant program for the agency. CRF is a Minnesota-based firm.
Wadensten said he received “so-so feedback from the Rhode Island business community” about how CRF administered the program. He noted that he might be making “a judgement” regarding CRF as service provider.
“Is this something someone in-state could do?” asked Wadensten of Pryor.
“We’re exploring all options,” said Pryor. “There is a possibility that we will ask a partner to do work, ranging from developing the app, by which businesses apply, to intake processing and the issuance of checks. That would be the entire array of activities.”
Pryor said the program administrator “could work in tandem with commerce, as well as potentially other state staff. So, this may be more of a hybrid model this time, so we can conduct some of these activities even more closely aligned with government. You know, closer to home, literally and figuratively. There are a lot of variables.”
Pryor said the program could require the participation of more than one administrator. “That’s why we aim to resolve all this in consultation with the committee, and although it’s a bit complicated, resolve rapidly.”
“I’m sure you guys learned a lot of lessons with CRF,” said Wadensten.
“Yes we did,” said Pryor.
Cassius Shuman is a PBN staff writer. Email him at Shuman@PBN.com.
