Maryland speeds up small-business grant and loan processing during coronavirus pandemic, but most applicants are left waiting

A rider participates in a lesson at Full Moon Farm in Finksburg in this 2015 file photo.

Maryland officials say they have made progress both in processing and paying out grants and loans that have been slow to reach small businesses struggling to stay afloat during the coronavirus pandemic.

But more than two months after Gov. Larry Hogan announced the aid, most businesses that applied for relief through a $125 million state program are still waiting, either for word of approval or, better yet, a check. And demand far outweighs availability, as small businesses that have lost sales or have been forced to close seek a lifeline to pay workers, suppliers, landlords and other expenses.


Improvements to processing times have allowed the state to approve hundreds more grant and loan requests in the past two weeks, officials said. But the money continues to trickle out slowly. Just over a third of available grant funding and less than 3 percent of the loan funds have gone to recipients, according to figures provided Wednesday by the state Department of Commerce.

As of Friday, the state approved 4,500 grant applications totaling roughly $45 million, close to the $50 million program’s capacity. The department has sent more than half of the approved applicants agreements to review and sign and expects the rest will be sent for signatures within the next two weeks.


But so far, just 1,600 businesses have been issued grant checks, totaling $17 million.

And delays have been even longer in the state’s $75 million loan program, which offers loans of up to $50,000. As of Friday, the state had sent 93 loan agreements totaling $4.1 million to applicants for final review and signing. Loan checks have been issued to 45 applicants for a total of $2.06 million. The approvals represent a small fraction of the 9,000 loan requests.

“Imagine a disaster area, and the people had to sit on the steps of their house for three months before they got any relief,” said Del. Courtney Watson, a Democrat who represents Howard County. “It’s not fast enough."

For many, the waiting and uncertainty are taking a financial and emotional toll.

Full Moon Farm, a licensed stable in Finksburg that offers riding lessons, camps, horse shows and other activities, has lost three-quarters of its income during the pandemic. But the stable still must pay thousands of dollars each week to care for its horses with hay and feed.

Co-owner Karen Fulton applied for both a state grant and loan March 24 and was told April 14 that the farm was approved for a grant. But the business has not received the grant or heard one way or another regarding the loan. A forgivable loan through the federal Paycheck Protection Program that has kept employees working will run out soon.

“I’m just worried that in two weeks, we’re going to be back where we were again,” Fulton said. "If things don’t open back up, we won’t have the money to keep paying people like we would if we were on a normal June schedule. ... The whole thing is just so unnerving. It’s just terrifying.

Hogan announced the $175 million of grants, loans and other small-business programs in March. Delays occurred initially because the commerce department needed to create a new division staffed by volunteers and make sure it did not approve more applications than funds could cover, Commerce Secretary Kelly Schulz had said. Also, many applications were incomplete and lacked necessary documentation.


“We have made significant progress” since mid-May, said Karen Glenn Hood, a commerce department spokeswoman. “We are now processing about 200 applications per day, sometimes even more.”

Those who were approved for grants represent less than a quarter of the demand for grants. The state received about 20,000 applications for grants before it stopped taking requests.

“We are communicating with every grant applicant,” Glenn Hood said. “For those that we are sure won’t receive funding, we have advised that we are still continuing to process the grant applications in the event more funding is allocated to the program.”

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.

The state said it decided it could get money into the hands of businesses faster if it focused first on the grant program before turning more attention to the loan program. Officials have approved an additional 833 grants since mid-May, when it reported having approved 3,667 grant applications.

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As of Friday, state officials had certified 1,102 loan applications totaling $50.6 million, meaning the applications were reviewed and approved and agreements ready to be 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.

Watson, the Howard County delegate, said she believes the commerce department hasn’t been given the resources to process loans and grants fast enough. She and other state lawmakers have complained that money is not getting into owners’ hands fast enough.

“Getting the money is one thing, but knowing you are going to get it is another thing,” Watson said. “They can’t make any plans."

Glenn Hood said there is no specific timeline for the loans, but “we are close to wrapping up the grant program reviews, we hope to have all the loan applications reviewed within the next two weeks and funds will continue to be disbursed,” she said.

The commerce department brought on more than 150 volunteers from other agencies to help with the 30,000 grant and loan applications, nearly doubling the department’s size temporarily, Glenn Hood said.

Commerce department workers, helped by the volunteers, “are working as hard as they can,” Watson said. But “the emergency relief really needs to be urgently received and that’s just not happening here.”