Update: Legislators OK More Money for ‘Ready for Business’ Grants

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The Arkansas Legislative Council on Friday approved allocating more federal money to meet up to $147.7 million in grant requests made by small businesses under the “Arkansas Ready for Business” program.

The Hutchinson administration’s request for the money came after the program, designed to help small businesses reopen as Arkansas rolls back COVID-19 restrictions, experienced loan demand beyond the $55 million allocated to it by legislators last weekend.

Legislators granted the request despite continued frustration about how the program was designed, publicized and rolled out. The program took applications earlier this week following what Gov. Asa Hutchinson described as a “premature” launch on April 29, which took place before legislators could approve the use of federal coronavirus emergency aid money for the grants. 

Businesses also complained they had little to no notice of the program’s availability, and demand for grants quickly outstripped the original funding allocation. 

On Friday, some legislators questioned why they should allocate more money to a program that didn’t function properly.

“I think it’s a complete failure on all our parts to put more money in it all,” Sen. Robin Lundstrum, R-Springdale, said. “We need to clean it up first, then say, based on the fact that it is cleaned up, we put more money in it. This tells the people of Arkansas, yes the program’s a failure but we’re going to throw more money at it and hope it works. That’s not the right thing to do at all.”

But others sought to err on the side of action rather than delay getting money to businesses in need.

” …[For] us to say we’re going to dilly-dally around for a month while we figure out how to make this program perfect, while these entities just disappear, I think is a failure of us to do our job,” Senate President Jim Hendren, R-Gravette, said. “Is there going to be some money wasted? Probably. But are there going to be some businesses saved and jobs retained? Definitely. And hopefully with the audit function and so on we can go back and recoup any of the money that was improperly spent.”

One legislator, Sen. Blake Johnson, R-Corning, suggested that lawmakers vote to release half the additional allocation now and half later, in case of a resurgence of the virus that might cause businesses to close again. He also said the grant program is not a “bailout,” but a resource for businesses to purchase personal protective equipment and other essential items and services to help them reopen.

Sen. Jonathan Dismang, R-Beebe, who made the motion to provide up to the full amount of grant requests, said that while the program is not what he’d envision, the correct path now would be to get the money to businesses as quickly as possible.

Under the program, led by the Arkansas Economic Development Commission, businesses can receive $1,000 per employee and up to $100,000 total. They can use the money to buy supplies including personal protective equipment, no-contact thermometers, no-contact point-of-sale payment equipment, cleaning supplies and hand sanitizer stations.

The program received 12,233 applications covering businesses with 196,001 full-time employees and 50,220 part-time employees.

On Friday, the AEDC told legislators it planned to have 20 employees begin reviewing the more than 12,000 applications this weekend. Applications will have to be cross-checked against an Arkansas Department of Finance & Administration database to make sure businesses meet certain requirements.

Speaking to legislators before the vote, Commerce Secretary Mike Preston, whose department includes the AEDC, said the agency would give funding priority to smaller businesses with fewer than 50 employees. He said about 20% of applicants were from the food and beverage and hospitality sector, which has been hit particularly hard by COVID-19 restrictions.

Under rules set by the AEDC and approved by legislators, at least 15% of grant recipients will be women- or minority-owned businesses, and 75% of total funding will go to businesses with 50 or fewer employees.

The committee’s vote on Friday included the stipulation that any money not allocated during the grant approval process be returned to the state. Arkansas is using part of its $1.25 billion allocation of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act.

AEDC said it aims to have the first round of funding to recipients by the end of the month.

Arkansas Ready

At his daily press briefing, the governor thanked legislators for approving the money.

“I applaud the General Assembly and thank them for their partnership and leadership that will help us to get this money into our economy and the businesses that need it,” he said. “It will be a welcome relief to many of the small businesses across Arkansas.”

Steuart Walton, the grandson of Walmart Inc. founder Sam Walton who is leading the Governor’s Economic Recovery Task Force, also announced a new website, called ArkansasReady.com, to provide information about how businesses in Arkansas can reopen.

“This website is going to provide both industry specific and institution specific information to help us reopen the economy in a safe way,” Walton said. “We see it as a comprehensive resource for both businesses, customers, managers, owners of enterprises across Arkansas, where they can go to get actual, factual information about what they’re going to need to do.”