Small businesses in San Antonio will soon be able to apply for grants from federal COVID-19 relief funds available under the American Rescue Plan Act.
The city council voted unanimously Thursday to open applications Aug. 1 for grants ranging from $15,000 to $35,000 aimed at helping businesses that have lost revenue during the pandemic.
Of the approximately $327 million San Antonio has received from ARPA, the council has designated $30.9 million to help small businesses. About $17 million of that will go to grants approved Thursday, which will be awarded and distributed before the end of the year.
The board has yet to work out how to spend the remaining $14 million, though Thursday’s vote approved a basic framework to train the workforce, strengthen business development organizations, help businesses improve their digital presence and encourage consumers to spend their money on local businesses.
“This sum of money [$17 million] can help about 850 businesses,” said Jeremy Roberts, chairman of the Small Business Advisory Commission who advised the city on how to spend its pandemic relief money. “It doesn’t help everyone…but we’re doing what we can to help those in immediate need first.”
Thursday’s vote came as the City Council enters its July recess. It will not meet again until August.
Although council members agreed on the urgency of approving small business grant money before then, questions and conflicting opinions remain about how the city should approach helping businesses that have been affected by the pandemic.
Despite previous rounds of federal financial assistance throughout the pandemic, the San Antonio Hispanic Chamber of Commerce estimated that more than a third of small businesses have already failed since the coronavirus took hold in the spring of 2020, triggering shutdowns and other trade restrictions.
With those numbers in mind, much of the discussion about this round of funding has focused on whether the city should be spending ARPA money on efforts to build a stronger infrastructure of support for small businesses that have successfully overcome the pandemic. Among the criteria for this round of financing, companies must be able to demonstrate a minimum reduction of 20% in their gross revenues from 2019 to 2021.
“As a small business owner, I know I couldn’t go on living for two years. [that] loss — this is unheard of,” said Robert Melvin, president and CEO of San Antonio for Growth on the Eastside, a nonprofit that supports small businesses.
“However, these funds can be used to improve [business development organizations] it would allow them to be more successful in the future…allowing the city to reconnect with a growing and thriving small business community,” he added.
The Small Business Advisory Commission, which includes several leaders of these nonprofits, previously developed a plan that would have directed about $6 million of ARPA funds to these organizations.
Last week, the council’s economic and labor committee called an emergency meeting to quash that proposal, shifting more of the money to individual grants.
“Our feeling was that we needed more cash injections, and we needed more direct access to funds,” said Marina Gonzales, CEO of the Hispanic Chamber, which pushed for the change. “ARPA was meant to be a bailout law, not a sustainability or ecosystem development law for later.”
At Thursday’s city council meeting, differences of opinion over how the city should help small businesses were still on full display.
Councilor Mario Bravo (D1) proposed an amendment to the plan that would require companies that are behind on their utility payments to enter into a payment plan with CPS Energy before they can receive ARPA.
The board voted not to include this requirement for companies applying for the $17 million in grants, but agreed to consider it for people helped by the remaining $14 million.
Bravo’s idea infuriated a business owner in his district, Augustine “Augie” Cortez Jr., owner of Augie’s Alamo City BBQ Steakhouse, who stormed the podium after being blocked from airing his complaints.
“I owe CPS more than this [grant] the check is going to be,” said Cortez, who suggested the city should work with its utility to help struggling businesses.
Cortez was this year’s El Rey Feo after raising over $300,000 for scholarships. The Hispanic Chamber recently held a meeting at its restaurant in an effort to help build business.
Referring to the city council, Cortez said in an interview, “These people have the ambition to try to run the city, but they have no idea about local affairs.”
Rent for Cortez’s lower restaurant on Broadway costs about $12,000 a month, and utilities cost an additional $3,500 a month, he said. He plans to apply for the small business grant, even though he thinks he will have to close his Broadway restaurant, one of two restaurants he owns, before the end of the year.
“It’s not just about business,” Cortez said. “It affects my family, it affects my wife, my livelihood, our personal debt, our personal bills.”
Augie’s barbecue is among the businesses that could benefit from an additional $10,000 grant due to its proximity to a city building project, an idea that was included in Thursday’s plan at the request of Cheer. The city’s eligibility framework lists 19 ongoing construction projects that could get business owners eligible for more money.
The city will not require businesses to explain how they will use the grant money. But Economic Development Department Director Brenda Hicks-Sorensen said Thursday that federal guidelines state that the money cannot be used to pay overdue bills or debts.
San Antonio partners with microlender LiftFund to administer the grants and relies on that organization to ensure the money is spent according to federal guidelines.
Applications will be accepted August 1-22. The city plans to market the program and offer application assistance starting in July. All funds must be distributed by mid-December.
“To be perfectly frank, we could have used every dollar [from ARPA] on small business,” said Jim Hollerbach, another member of the city’s Small Business Advisory Board, who expressed disappointment that the group isn’t handing out a bigger share of the city’s $327 million.
“There are a lot of special interest groups out there that have harassed this funding since it was rolled out by the federal government,” Hollerbach said.