An emergency grant program for small businesses during the worst of the pandemic last year was supposed to give priority to minority and women-owned businesses in Mississippi in giving out grants up to $25,000 each from federal COVID-19 relief passed by Congress.
Although the program overall appeared to sputter — with only half the money allocated being spent — nearly half the grants approved did go to minority and women-owned businesses, as did $51.4 million of the $118 million in grants approved.
The Mississippi Development Authority, the agency that oversaw the grants using a private contractor, said it cannot provide a breakdown between minority-owned and women-owned businesses awarded grants. It reported that 18,015, or 53%, of all applications received for the program were from minority or women-owned businesses.
MDA reported that the entire Back to Business program awarded grants to 21,200 businesses, totaling $118 million. Of those, 10,579 grants totaling $51.4 million were to minority and women-owned businesses.
“The short answer is, I don’t think we did a very good job as legislators in putting the program together,” said House Minority Leader Robert Johnson III, D-Natchez, who helped negotiate the programs, and the priority for minority and women-owned businesses. “It helped, but again, the whole process ended up being too cumbersome and restrictive. There were certain (lawmakers) who wanted to police the money more than make sure we got it out quickly to businesses … There were also people who didn’t want to do the (minority) set aside at all.”
Lawmakers in May of 2020 earmarked $300 million in federal CARES Act money for small businesses with two programs. One, funded at $240 million, would provide Back to Business grants up to $25,000 each to qualified businesses that applied. The other, funded at $60 million, would provide “automatic” grants of $2,000 each — no application necessary — to businesses shut down by state COVID-19 actions.
For the Back to Business program, $40 million for the first 60 days of the program was to be reserved for minority and women-owned businesses.
But the program moved slowly, and business owners reported problems navigating bureaucracy and red tape, and by August, only 1% of the Back to Business grant money had been given to businesses.
An analysis of the program by Mississippi Today showed that only about half of the $300 million was spent. The rest was redirected to other pandemic programs, such as rental assistance grants, help for hospitals and veterans, with the bulk swept into the state’s unemployment insurance fund.
Johnson said he hopes lawmakers have learned a lesson with the business grants programs as Mississippi receives more federal pandemic relief.
“We don’t need to make things too restrictive,” Johnson said. “… All (the federal government) had asked was that we verify it was going to small businesses. But this was frustrated by certain members who were more intent on policing the money. This wasn’t just partisan, it was Democrats and Republicans. We had conservative House members, members of both parties, who were sitting there appalled that we made this so hard, so cumbersome that we ended up spending only half the money and not meeting the objective of the federal money, which was to get it into the hands of our small businesses to keep the economy going.”