Aimed at those ‘falling through the cracks’
By the end of next week, 10 small businesses in the Methow Valley will receive grants of $1,500, providing a financial safety net to help them survive during the coronavirus pandemic.
The grants are offered through a new local program launched this month by TwispWorks and Methow Valley Long Term Recovery, with the goal of helping businesses in the valley that are “falling through the cracks,” said Don Linnertz, TwispWorks executive director.
Called the Methow Valley Small Business Emergency Grant, the new program will support business owners through immediate financial relief and, hopefully, prevent the permanent loss of local businesses due to the pandemic.
Since the start of the economic shutdown due to COVID-19 in March, TwispWorks has been working with more than 400 local businesses to help them secure unemployment benefits or apply for relief through programs like the new Paycheck Protection Program (PPP). But many small businesses have been waiting for weeks for their requests for financial help to be processed, or they simply don’t qualify for existing assistance programs, Linnertz said.
Those businesses are at risk of falling through the cracks, and there are many examples in the valley, Linnertz said, including:
• A small office/art supply store owner who received a PPP loan and is able to pay employees, rent, and utilities, but has no working capital to purchase inventory, and is not able to pay herself.
• A hairdresser who is a sole proprietor and was unable to obtain a PPP loan. Rent on her salon is past due and it will be many weeks before she is able to reopen.
• A restaurant owner whose employees are receiving unemployment, but who has little working capital to purchase ingredients for a new take-out menu.
• Several recently purchased businesses that do not qualify for PPP because the new owners don’t meet a requirement of being in business prior to Feb. 15, 2020.
• Many house cleaners, landscapers, therapists, music teachers, performers and other self-employed small business owners who are struggling to meet fixed expenses that can’t be met through local food banks or social services.
Relief and recovery
The Methow Valley Small Business Emergency Grant program will provide one-time, $1,500 grants for immediate relief, such as rent payments, utilities, and other fixed business expenses. The grants can also be used for recovery purposes, such as projects to help businesses pivot to new markets – including developing a web presence or eCommerce site, or any other idea to make a business more resilient.
“This is designed to give people a bridge between the crisis they’re in now, and when their application [for PPP or other assistance] will be approved, or when the business will resume,” Linnertz said. “Our small business community is the backbone of the Methow Valley economy and we’re working hard to help them out.”
The program, administered by the TwispWorks Foundation, has $20,000 to give to local businesses during the first round of funding. Applications are being accepted this week, and grants are expected to be awarded on May 21. The initial funding was provided by Methow Valley Long Term Recovery ($5,000) and the TwispWorks Foundation ($15,000). A campaign is underway to raise additional funds to provide more grants in coming weeks.
The need to support local businesses became apparent soon after Gov. Jay Inslee issued “stay home” orders in March to contain the spread of COVID-19 (the disease caused by the coronavirus) in Washington.
“As the community stepped up to provide food security and ensure that basic family needs were met, the Methow Valley Long Term Recovery partner organizations started to recognize this emerging need. At the same time, we at TwispWorks were hearing about it in our direct outreach to business owners,” Linnertz said.
In the first weeks of the shutdown, as most businesses closed and employees were laid off or furloughed, many people turned to Room One, the Methow Valley’s social services provider, for help with immediate needs like food and utility payments.
“We were getting calls from business owners,” said Kelly Edwards, Room One interim director. “Especially in this valley we have so many entrepreneurs and self-employed people – massage therapists, artists, salon owners. They’re individuals and community members trying to make ends meet. We were working with them, trying to problem-solve their own personal financial needs, and they had another layer of their business needs,” Edwards said.
Methow Valley small business facts
• 90% of Methow Valley businesses report lost revenue as a result of COVID-19 restrictions.
• 39% have taken on debt to pay bills.
• 41% report greater than 75% loss in income.
• 53% have not qualified for or received funding through existing programs.
• 47% are deemed “nonessential” and are currently closed.
• 98% have nine employees or fewer.
• Smallest businesses with fewer than three employees have been hit hardest by COVID-19 restrictions.
• Of essential small businesses that are open, most are working at less than 25% of their capacity and some are operating at a loss to continue serving the community.
• TwispWorks has contacted more than 400 businesses to provide support.
• More than 95 businesses have successfully secured funding through existing programs.
Information provided by TwispWorks
“The small businesses in our community are what make up the ecosystem of our valley in such a beautiful way. They are so many of our employers and our neighbors,” Edwards said. “Room One was trying to support people with no income coming in. We could hear that they really needed support on the business front. We can help with individual and household needs, but it was out of our wheelhouse to give business loans.”
Edwards sits on the board of Methow Valley Long-Term Recovery, the organization created after the Carlton Complex fire in 2014 to guide post-disaster recovery in the valley. During weekly conference calls with the board, she described the unmet needs that local business owners were experiencing. “It took people weeks and weeks to … navigate unemployment and the complexity of federal assistance,” Edwards said. The discussion led to the concept of creating a mechanism to help businesses bridge the financial gaps they faced and remain viable.
Glenn Schmekel of The Cove food bank, also a Long-Term Recovery board member, said his organization also saw a surge of requests for help in the immediate aftermath of the economic shutdown. “The food bank [demand] increased 40 percent right off the bat,” he said.
“Now we’re moving toward a focus for recovery that I believe is going to transfer from immediate needs of families to long-term needs of our businesses and economy,” Schmekel said. “As we work together, this is a great way for our whole valley, economy and small businesses to thrive.”
In The Cove’s 22 years, the food bank has never been this busy at this time of year, Schmekel said. Seasonal workers who have been unemployed during the slow shoulder season of late winter “are usually back to work” as tourism and construction pick up in the spring, but not this year. However, Schmekel predicted, “the 40 percent increase will go down with a successful recovery. I’m excited about that potential.”
Assistance for local businesses has been offered through state and federal sources, but that relief hasn’t reached all the Methow Valley business owners who need it, or when they need it. The federal CARES coronavirus relief act, for instance, provides for expanded unemployment benefits, called Pandemic Unemployment Assistance (PUA), for sole proprietors or self-employed people who normally would not qualify.
“To qualify for this, you have to go through the traditional application process, get denied by the system, and then reapply under PUA,” said Julie Tate-Libby, TwispWorks program director. “It’s probably their way of tracking who qualifies for non-traditional benefits … from what I hear the process can take up to three weeks or more.”
Those delays in assistance have put small business owners in a bind, Linnertz said. “Your bills build up while you’re waiting, and you’re already behind because it’s probably six weeks since you’ve worked,” he said.
A state program, called the Working Washington Small Business Emergency Grant program, appropriated $10 million to Washington counties to be distributed to businesses in May and June, Linnertz said. “Because of our population, Okanogan County received only $75,000 for this program, but in the first day, 118 applications totaling $1,020,000 in requests were received. Of the 118 applications, 51 were from the Methow Valley and only 12 valley businesses were among the 32 applications forwarded to the state for consideration,” he said. “Maybe two or three will get money from that.”
The Economic Alliance of Okanogan County has been working in parallel with TwispWorks and Methow Valley Long Term Recovery to develop a countywide effort to support and retain small businesses, with the fundraising and granting process managed by local teams, Linnertz said.
The Methow Valley team, which will evaluate grant applications from valley businesses, consists of members of the TwispWorks’ Healthy Economy committee which includes the mayors, chambers of commerce, and other community representatives.
To apply for the grants, Methow Valley business owners fill out a survey and application on the TwispWorks website. According to information on the website, grant decisions will be based on several factors, including business owners who demonstrate immediate need or innovative ideas to grow their business during this time. Applications are encouraged from small, service-based businesses, businesses unable to operate during this time, and those with three or fewer employees.
Linnertz said TwispWorks Foundation is seeking donations to the Methow Valley Small Business Emergency Grant program for another round of funding for local businesses. Donations can be made online at http://www.TwispWorks.org, or by mail to TwispWorks, P.O. Box 264, Twisp WA 98856. Gifts should specify they are for the Small Business Emergency Grants.