Post and Courier
December 17, 2020
By Seanna Adcox
COLUMBIA — South Carolina has postponed sending promised state grants to struggling small businesses and nonprofits, which could wait an extra week or more to learn whether they’ve won a small lifeline toward surviving COVID-19.
And the winners likely won’t get the cash, expected this month, until January.
State officials blamed the volume of applications and required verification.
Notifications to applicants chosen to receive a piece of $65 million in coronavirus aid that the Legislature approved in September, and how much they’ll get, will start going out by week’s end and wrap up Dec. 30, according to the state Department of Administration, which is supervising the process.
That’s weeks later than expected, which could seem like a lifetime for business owners unable to pay their bills amid the continued pandemic, said Frank Knapp, president of the state’s Small Business Chamber of Commerce.
“I’ve gotten calls and emails asking, ‘When’s it going to happen?’ They’re anxious out there,” he said. “Waiting until January is just going to cause more small businesses to go out of business.”
Winners were supposed to be notified no later than Dec. 15, according to a timeline announced in October when Gov. Henry McMaster traveled the state urging businesses and nonprofits to apply — and quickly, considering the tight, two-week application period.
A Nov. 4 news release announcing that 11,217 had applied by the deadline gave a quicker turnaround, saying notifications will go out in early December and the money would be in hand by mid-December.
Instead, the state Department of Administration posted an update Tuesday pushing back the timeline, which will meet a federal deadline potentially by minutes. The money is provided through a law Congress passed in March, which requires the money to be designated by Dec. 30, or it reverts to federal coffers.
The sheer volume of need, coupled with the steps taken to verify the applications were legitimate, delayed the process, state agency program director Brian Gaines said.
“We got way more applications than any of us anticipated or expected,” he told The Post and Courier on Wednesday, when the wording on the notification letters was still being finalized.
Legislators created the grants in September, setting aside $40 million for small businesses and $25 million for nonprofits, under a compromise that spent the remainder of a $1.9 billion chunk of federal COVID-19 aid for South Carolina.
The Legislature capped awards at $25,000 for businesses and $50,000 for nonprofits.
Combining both programs, applicants sought 4½ times above the total available.
More than 9,600 small businesses applied, collectively seeking $213.3 million. And nearly 1,600 nonprofits applied, requesting a total of $76 million.
That means $224 million worth of requests had to be turned down.
Legislatively created panels were tasked with deciding who gets the aid and how much.
The small business panel, consisting of officials with the state’s Commerce, Revenue and Minority Affairs agencies, last met Tuesday, when the update went out.
At their first meeting Dec. 2, a month after the application deadline, they created a weighting system based on the Legislature’s priority goals. Businesses were assigned one point each for the following: being minority-owned; having 15 or fewer employees; not receiving any other COVID-19 government aid; and being required to close, either partially or fully, by McMaster’s COVID-19 orders back in the spring.
The nonprofit panel, made up of people from nine state agencies, created a 15-point priority scale at its first meeting Nov. 18 and last met Dec. 10.
“It sounds to me like it wasn’t a priority,” Knapp said. “Shame on them.”
Department of Administration spokeswoman Kelly Coakley said the agency moved as fast as it could, while ensuring the money gets to where it’s most needed.
“We understand the urgency and the need and what these folks are facing,” she said.
A lot of work was required before the panels’ evaluations could begin, Gaines explained.
That included checking to make sure the business or nonprofit actually existed, had no outstanding tax liens and met the Legislature’s requirement of being in operation since at least September 2019.
That review led to more than a quarter of the small business applications being disqualified, according to meeting minutes provided to The Post and Courier.
“It was a tremendous amount of legwork,” Gaines said. “The last thing we wanted to see is that we’ve awarded a grant to a business that’s not a legitimate business.”
It’s unclear how many nonprofits were deemed ineligible, as minutes from its Dec. 10 meeting were not available.
The head of an education nonprofit in South Carolina described an ever-changing application process that required her to upload more than 200 supporting documents.
The lack of any communication for the 6½ weeks since is incredibly frustrating, said Casey Pash, president of Junior Achievement of Greater South Carolina, which normally puts volunteers in K-12 schools to educate students about potential careers and teach them business skills and how to budget their finances.
“I’ve heard absolutely nothing from them,” she said, adding it was a giant headache even for an organization like hers that applies for grants regularly.
Pash said she doesn’t expect to get a grant, knowing priority was placed on nonprofits that provided food, shelter, help in paying bills and other direct aid to residents. But she felt it was important to at least apply, if only to inform lawmakers of the extent of services impacted by the pandemic.
The range of the nearly 1,600 that applied “shows we have nonprofits in our state that do good things and help at a time of need,” she said, noting her group has shifted to helping with virtual learning. “Hopefully, elected officials can look at this as a way of seeing what else is being done.”