More — but not all — Alaska small businesses to become eligible for grants

Department of Commerce and Economic Development Commissioner Julie Anderson appears in a committee meeting during a confirmation hearing in Juneau in January 2019. Anderson announced a series of changes to AK CARES grants for small businesses on Wednesday. (Photo by Skip Gray/360 North)

More Alaska businesses will be eligible to receive grants providing relief from the COVID-19 pandemic. The state government announced on Wednesday a series of changes to the $290 million program funded by the federal CARES Act. 

But some business owners and advocates say the changes don’t go far enough. 

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Some business owners have been concerned that they won’t be able to receive AK CARES grants because they also received other federal relief.  

Julie Anderson, commissioner of the state Department of Commerce, Community and Economic Development, announced the changes to the program, which provides grants between $5,000 and $100,000 to cover business expenses. 

“We are confident that this is going to open up a lot of funding opportunities for many of Alaska’s small businesses,” she said during a House Finance Committee meeting.

The changes include:

  • Any businesses that receive up to $5,000 in two other federal programs the Payroll Protection Program and the Economic Injury Disaster Loans] will still be able to receive the AK CARES grants. 
  • Also, businesses that return money from these federal programs will be able to receive the grants. 
  • Businesses that received other federal relief, including indirectly through grants from municipalities, will be eligible. 
  • And business associations — like chambers of commerce — also can receive grants.

Previously, the state had said businesses were ineligible if they received any federal aid, under rules the administration proposed and the Legislature approved. 

Tim Dillon was encouraged by the changes. He’s the executive director of the Kenai Peninsula Economic Development District Inc. It’s one of 10 Alaska Regional Development Organizations, or ARDORs, that have been helping small businesses apply for relief. 

While Dillon doesn’t believe anyone was trying to exclude businesses, he said they should never have been put in the position of becoming ineligible for the grants. 

“The business owners did exactly what the congressional delegation, the state administration, state legislators, the Small Business Administration, the ARDORS, local government specialists — what everybody was telling them to do,” he said.

Dillon said the state should consider opening up the AK CARES grants to all businesses with less than 50 employees. 

“I think by the time this next phase is through, you’re going to find that you still have money and the last thing we’re going to one to do is be the only state in the union to have to give money back because we can’t figure out how to give out free money,” he said. 

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State contractor Credit Union 1 has approved 83 businesses for grants, while denying 26 — most of those because they had received federal aid. The credit union is still processing 1,400 applications. 

Vivian Mork Yéilk’ was among those who told the committee that she is interested in a grant. She owns Planet Alaska, a Juneau shop that sells art and other products made in the state. 

“Just like a lot of businesses, we are hurting at this moment and, you know, when all of this started, we did all the right things to help protect our fellow citizens, and shut the doors,” she said. “And this was going to be one of our best economic years because of course tourism was increasing. And then we got hit pretty hard.”

Yéilk’ said a grant would help her business survive the transition to the post-COVID-19 retail environment, with more online sales and safety measures in the shop. But she received just enough federal relief to miss qualifying under the new state rules. 

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Yéilk’ wanted the Legislature to reconvene in a special session to further expand the eligibility for the grants. 

The changes that Anderson announced will be implemented in the coming days. 

Department of Law attorneys say they will likely pass legal muster. But a lawyer for the Legislature says they could face a legal challenge. 

Several other business owners that testified to the committee provide child care. They said that without enough financial relief, they won’t be able to operate. And they said not having child care will undermine other businesses’ ability to reopen successfully.