Rachael Lutz is a promising proprietor in Michigan with several businesses – none of which were helped by the federal government’s PPP. But this money can help entrepreneurs like her.
LANSING, MI — Rachel Lutz knows how to pivot to keep her businesses on track.
The Clio resident worked as a yoga instructor and photographer before the coronavirus pandemic took hold of all aspects of Michigan life. Since then, even the jewelry she sells through her Etsy shop began to move more slowly as people reevaluated their spending habits.
“With the pandemic restrictions on gatherings, those [business ventures] have been hard,” she told The ‘Gander.
Using her motto of “adapt, adapt, adapt,” Lutz is pivoting once again to dog grooming services to keep a steady cash flow.
Her newest business is not eligible to secure funding through the federal government’s Paycheck Protection Program (PPP) — which ultimately benefits large corporations most — but new funding from the state may help ease the burden the coronavirus pandemic has put on Michigan’s small business owners and promising proprietors like Lutz.
A Grant That Meets the Needs of Michigan’s Most Vulnerable Communities
The new grant program will give $115 million to Michigan small businesses, nonprofits, farms, and agricultural processors who were hurt by the pandemic-induced forced closures and economic downturn. It comes from Michigan Economic Development Corporation (MEDC).
“It could greatly help with [offsetting] start-up costs,” Lutz, a new business owner, told The ‘Gander. “This is a turbulent time…[we all should] remember to stay kind through the consumers’ needs.”
The grants specifically earmark $10 million for agricultural processors and $5 million for farms through the Michigan Agricultural Safety Grant Program. The agricultural grants will provide a maximum of $1,000 per employee for coronavirus-related costs such as testing, personal protection equipment, and housing needs. To qualify, these businesses must have at least 10 employees.
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Gov. Gretchen Whitmer said it’s critical to support Michigander-owned and -operated farms.
“Michigan’s food and agriculture sector has been especially hard hit by the COVID-19 virus, and this investment will provide critical resources to ensure the safety of the state’s food production industry and its workforce,” Gov. Whitmer said in a statement. “We can further our economic recovery in the state by putting federal dollars through the CARES Act to work for the people and business across Michigan through efforts like these grants to farms and food processors.”
Why Michigan Remembers Those That PPP Forgot
The remaining $100 million not going toward agriculture and farms will go to Michigan’s small businesses and nonprofits through the Michigan Small Business Restart Program. To qualify, an applicant must have no more than 50 employees and may not have received grants through a $20 million relief program created in March. The maximum grant is $20,000 and can be used for payroll, rent, mortgage payments, utility expenses, and other costs.
Nicole Jackson Williams is a Detroit-born small business owner of There 4 U Home Care. She’s worked in the industry for over a decade and has run group homes for the eldery and disabled with her husband.
“I started this company in 2018 but it’s really taken off in the last year,” said Williams, who also applied for PPP.
At least 30% of the new Michigan-allocated funds must go to businesses owned by women, minorities, or veterans, according to the MEDC. Williams says she’s pleased to hear that the considerations are being made.
This is a stark contrast from how the Trump Administration’s federal PPP support was allocated. New data released this week shows only 5% of Michigan’s eligible minority-owned businesses actually received funding.
While the everyday entrepreneurs of Michigan like Williams are being overlooked for substantial PPP funding, the state’s large corporations, private colleges and businesses tied to Republican politicians are getting the funding, newly-released data shows.
Jackson-based Orbitform, which was founded by Republican Senate Majority Leader Mike Shirkey and builds assembly machines for manufacturers, was among the million-dollar Michigan recipients, for instance. Another was Renaissance Global Logistics of Detroit, whose CEO is John James, the Republican challenger to Democratic U.S. Sen. Gary Peters.
Among the 185 entities in Michigan receiving the most aid — $5 million to $10 million — were the private liberal arts institution Albion College, Kalamazoo’s Bell’s Brewery, and several large law firms, the government reported.
PPP was the Trump Administration’s first and only economic answer to the coronavirus for businesses and it was supposed to be directed at local entrepreneurs. NPR digs into how details of the program were murky, leading to no clear rules for the program’s first round of loans worth $349 billion. The end result was that the money flowed to large corporations, COURIER reported, including restaurants and hotel chains as some of the largest beneficiaries of the PPP.
The initial run of the program saw nearly 400 publicly traded companies receive almost $1.3 billion in loans, according to an early independent analysis of financial record filings.
Are You A Small Business Owner? Here’s How to Apply For Michigan’s Grants
Applications open on July 15. The state will distribute the funds to 15 local economic development organizations. These organizations will then distribute the awarded grants to eligible businesses and nonprofits by Sept. 30.
“Families across the state depend on small businesses for their livelihood, and the Michigan Small Business Restart Program will build on additional COVID-19 business relief efforts through the MEDC to create a strong foundation for Michigan’s long-term economic recovery,” Gov. Whitmer said.
CEO of the Michigan Economic Development Corporation Mark Burton called the programs the “next step towards ensuring Michigan small businesses and workers receive the support and resources they need to not only survive this outbreak but to continue thriving into the future.”
He said he expects demand for assistance to exceed the $115 million available. Restaurants in most of the state, for instance, are operating at half capacity yet are likely not earning even 50% of their normal profit. Other places of public accommodation like gyms and movie theaters remain closed under orders to curb the spread of the virus.
“There’s obviously a fear that we’re not going to be reopening as quickly as we thought, given some of the activity we’re seeing especially across the country,” Burton told reporters.
Small businesses and nonprofits interested in Michigan’s upcoming grants can apply at michiganbusiness.org/restart. Michiganders in need of agricultural grants can apply at michiganbusiness.org/agsafety.
The Associated Press contributed to this story.