Harrisonburg approved 78 businesses for grant money from CARES Act funding the city has received, according to a Tuesday press release from city staff.
Of the businesses approved for funding, most are restaurants, retail shops, hotels or entertainment spots, according to the full list provided to the Daily News-Record by Peirce Macgill, the assistant director for economic development.
Such businesses “have been hit the hardest, so we really were promoting it really hard to that sector,” Macgill said.
Other types of businesses slated for grants include law firms, barbers, and health and well-being operations.
In total, $418,700 in grant money will be dispersed to the businesses.
The grants will range from $4,000 to $10,000 depending on the number of full-time employees, according to previous interviews with city staff.
The window for businesses to apply was between Aug. 13 and Aug. 27.
To be eligible for the grants, a locally owned and operated for-profit business must have been running on or before Jan. 1 and must have at least $25,000 a year in revenue, but not more than $5 million, according to the grant application form. The firm must also demonstrate that at least quarter of its revenue was lost due to the COVID-19 pandemic and that it is up to date on city taxes.
There will be a second round of business grants the city will begin next week with less eligibility restrictions, such as only having to prove a 10% loss due to COVID-19 instead of a 25% loss, Macgill said.
“That’s still a pretty big hit,” he said.
The diversity of industries in the city is a strength that helps the city “weather” economic uncertainty better, according to Macgill.
“Food processing and manufacturing has held pretty solid,” he said, adding that some employers are actually looking for more workers.
Macgill said the “fundamental goal” of the grant program is to keep people employed.
“It really does come down to jobs,” he said. “If you don’t have a job and you don’t have income, it’s hard then to support other businesses.”
Consumer spending, which accounts for roughly 70% of America’s gross domestic product, dropped by nearly 13% in April compared to March, according to data from the Bureau of Economic Analysis.
In tough economic times, “the first reaction [as a business is] you have to cut costs and the largest impact in cutting costs is cutting people,” Macgill said. “It takes just a little bit of loss before having to let people go.”
Businesses ineligible for the loans include non-locally owned franchises or chains not headquartered in the city, banks, nonprofits, contractors on digital platforms, such as Uber and Airbnb, or multilevel and network marketing, such as Mary Kay and Avon, home-based businesses and those engaged in rental real estate speculation or investment, according to the application form.
City businesses with between one to three full-time employees were eligible for up to $4,000. Firms with four to 10 employees could receive up to $6,000. Firms employing 11 to 25 people could receive up to $8,000, while those with 26 to 100 employees could receive up to the maximum amount of $10,000, according to previous interviews with city staff.
Hotel Madison was approved for funding through the program.
“It means a lot that the city recognizes how important their business base is to bouncing back from, from an economic standpoint, the damage COVID has done,” said Paul Gladd, a principal and co-owner of dpM Partners, the company that manages the hotel and the Shenandoah Valley Conference Center.
He said the hotel will use the money it receives carefully since it is unclear when the COVID-19 pandemic will end.
“We’ve already seen several businesses go under, and the fact [city staff] were able to act quickly I think is going to save businesses,” Gladd said.
In total, $850,000, or 18.4%, of the first $4.6 million in CARES Act funding the city received is slated for use on businesses — $750,000 in new grants and $100,000 to cover previous loans that were transitioned to grants, according to previous interviews with city staff.
The city is also slated to receive another $4.6 million from the CARES Act. City staff is working on a proposal on how to spend the money to submit to City Council for consideration at its next meeting on Tuesday.