More than seven weeks after Maryland Gov. Larry Hogan announced $175 million of grants, loans and other relief to help small businesses through the coronavirus pandemic, only a small fraction of the aid has been disbursed.
The Maryland Department of Commerce said it handed out about a fifth of the coronavirus relief grants and less than 5% of the available loan funding. The department, meanwhile, said it’s received so many applications that it stopped accepting new ones.
That’s left many small businesses, either shut down or operating on a limited basis due to the coronavirus, facing a cash crunch waiting for aid they’d hoped to receive quickly after Hogan, a Republican, announced it March 23. They need it to pay workers, suppliers, landlords and other expenses during a health crisis that has shut down schools, businesses and other activities.
“I was disappointed to see that there wasn’t more in grants and loan money that was getting out the door because there are so many businesses that are desperate right now,” said Sen. Shelly Hettleman, a Baltimore County Democrat.
She’s asked officials at the state’s Department of Commerce for a list of businesses receiving the grants and loans. The transparency would help ensure that the money is going to true small businesses, not large corporations like those that took advantage of loopholes to secure federal aid intended for small businesses, she said.
But the state hasn’t provided any information about the companies receiving the grants and loans.
“We want this to go to businesses that are local community small businesses, who are hurting right now and might not have the cushion that a larger business may have,” Hettleman said.
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In a letter to state lawmakers, Commerce Secretary Kelly Schulz said delays occurred because the department needed to create a new division made up of volunteers and to make sure it did not approve more applications than funds could cover. Also, many applications were incomplete and lacked necessary documentation, she said.
Of the $50 million for grants, the state has issued $9.5 million to 968 businesses to date, or about 20 percent of the available funding, the Commerce Department said. It has approved an additional 3,667 applications for grants and expects to provide those businesses with a total of $35.9 million.
About $1.2 million of the $50 million is expected to go to nonprofit groups.
Officials have issued 73 loans totaling $3.2 million, or 4.3 percent of available funding in the $75 million program. A total of 239 loans amounting to $10.9 million have been certified, which means they’ve been reviewed and loan agreements issued. Funds can’t be released until the loan agreements are signed and returned.
Loans of up to $50,000 were available to businesses with fewer than 50 employees, with a rate of 0% for the first 12 months and 2% for the remaining 36 months.
Del. Courtney Watson, a Democrat who represents Howard County, said she has heard from many small businesses in her district who applied on the first two days but had not heard as of last week whether they were approved.
“The bottom line is they’re waiting,” she said. “They’re waiting for money, and they can’t make plans for when and how to return because things are in flux... Many of these businesses now are going on missing two months of rent payments."
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State officials said they prioritized the grant program over loans, “to get that funding to businesses as quickly as possible,” said Karen Glenn Hood, a Commerce Department spokeswoman.
The state received about 20,000 grant applications and is continuing to review them. Businesses and nonprofits were eligible for grants of up to $10,000. The grants were not to exceed three months of the entity’s operating expenses.
Officials received about 9,000 applications for the loan program, meant to help businesses in financial stress or with disrupted operations.
Because of the volume of requests for both programs, most funding in both the grant and loans programs is expected to go to applicants who applied either March 23 or March 24, Glenn Hood said.
[ Maryland businesses receive $3.2 billion in federal coronavirus-related loans ]
A manufacturing grant program was launched several weeks after the grant and loan programs.
The state received about 230 applications for the Emergency Relief Manufacturing Fund, a $5 million grant appropriation to help local manufacturers and other companies produce personal protective equipment. The state has approved $3.4 million in grants to 48 manufacturers and sent agreements to those applicants.
The state stopped taking applications for all the programs “as the demand has outpaced our funding,” Glenn Hood said. “However, we are keeping all applications in queue in the event we receive more funding.”