State launches new grant program for small businesses hit by pandemic downturn

State officials released details Friday on a new $90 million small business and tourism economic relief grant program. The Legislature included funding for the program, from the 2021 federal American Rescue Plan Act, or ARPA, in the FY 2022 state budget.

The state Department of Commerce, Community and Economic Development is in charge of the program but the department is in the process of retaining a third party contractor to administer the grants, according to Glenn Hoskinson, spokesperson for the department.’

There are important differences between the new grant program and last year’s business grants under the federal CARES act. Grants will be capped at $1 million and instead of grants issued on a first-come, first served basis like last year eligible businesses will have a 30-day window to apply, with applications being accepted starting this fall.

Also, grants will be based on demonstrated needs. Businesses must have filed their 2029 and 2020 federal and state taxes and have held an active state business license as of Jan. 1, 2021, unless exempt under a section of law allowing exemptions.

Businesses must be Alaskan-based and if a sole proprietor, must be owned by Alaska residents. A business will also have to demonstrate a 50 percent loss of income.

‘We have a Request for Proposals (RFP) out right now looking for an administrator for the program as we do not have the in-house capacity to process the applications,” Hoskinson said in an email.

The RPF is at: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=203336

“We don’t have a clear timeline yet except that we’re aiming to open the application period this fall. Once we have an administrator in place, we’ll be able to provide a more specific timeline,” she said.

The governor had originally requested $280 million for the ARPA small business grants but the appropriation for FY 2022 was reduced during the budget process after the U.S. Treasury decided to release the funds to states in tranches, or segments. That means there will be more grant money next year, however.

The new program is more modest than the 2020 CARES act business grants but its being multi-year will somewhat make up for that.

“We recognize that the need far exceed this (FY 2022) appropriation, and that we cannot provide assistance to every business in need,” state DCCED commissioner Julie Anderson said.

“It is our hope that this is the first, not the last, appropriation of ARPA funds to Alaskan businesses and industries not reached by this program,” Anderson said in a statement announcing the program.

Still, many small businesses particularly in tourism lost huge revenues last year and will be unable to make it up this summer even with a visitor season that is partly recovered. The $90 million helps but will not prevent additional closures among many small firms, business leaders have said.

Gov. Mike Dunleavy urged small business owners to hang on. “Alaska’s business community is resilient and has partnered with our state throughout the COVID-19 response,” the governor said in a statement.

“As Alaskan-owned businesses continue to assess short-term and long-term economic effects of the pandemic, my administration is eager to distribute relief funding to provide certainty. My message to struggling Alaskan entrepreneurs is this: help is on the way,” Dunleavy said.