As the COVID-19 health emergency brings many industries in the nation to a standstill, the Wisconsin Economic Development Corporation approved a $5 million grant program to help small businesses.
Called Small Business 20/20 (SB20/20), the program will provide grants of up to $20,000 to targeted businesses with no more than 20 employees to cover rent and meet payroll expenses such as paid leave.
“This is an important first step by WEDC in helping small businesses in our state and their employees who are facing lost revenues, missed paychecks and other uncertainty due to COVID-19,” said Governor Tony Evers. “As the impacts of COVID-19 continue to be felt, we will be relying on WEDC to develop additional innovative programs to meet the needs of our state.”
WEDC Secretary and CEO Missy Hughes said it is meant for the “smallest of the small” businesses that are vital to their communities.
“Many of these businesses, especially retailers, restaurants and small service providers, typically operate on the narrowest of margins,” Hughes said. “Many don’t have the cash reserves needed to survive a substantial loss of revenue, which can happen with a prolonged emergency. SB20/20 will help put cash in the pockets of these businesses and their employees when they need it most.”
Additionally, WEDC is working to develop programming to help get resources out to communities and increase eligibility for participation.
The grants will be issued with help from the state’s 23 community development financial institutions (CDFIs). WEDC predicted that because CDFIs have pre-existing relationships with many of the small businesses, they will be able to provide the grants quickly and directly to clients.
CDFIs are specialized community-based financial institutions with a primary mission to promote economic development by providing financial products and services to people and communities underserved by traditional financial institutions, particularly in low-income communities. CDFIs include community development banks, credit unions and non-regulated institutions such as nonprofit loan funds or venture capital funds.
WEDC is encouraging CDFIs with a minimum organizational loan portfolio of at least $4 million to participate in SB20/20. In addition, smaller CDFIs are encouraged to work together and apply as part of a collaborative with a combined organizational loan portfolio of at least $4 million, designating one CDFI as the lead applicant/recipient of funds. CDFIs that don’t meet the minimum portfolio size are also encouraged to collaborate with the larger CDFIs to serve their clients.