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Hart Matkassian watches with growing despair as cars back up from the I-195 Washington Bridge to a restaurant in East Providence.
The streets are busy, but his Portuguese restaurant and banquet hall on North Broadway feels empty. His profit margin is also gone.
Four months after the sudden emergency closure of the westbound bridge in December, business remains down by more than a third. He offered a job to a prospective employee but was turned down due to unpredictability and heavy traffic.
And state and federal aid programs meant to help small businesses like his have not helped at all.
“I don’t believe that the people making the decisions have any knowledge about the business, what we’re going through, and what we really need,” Riviera Restaurant owner Matkassian said in a recent interview. ” he said.
Case in point: the U.S. Small Business Administration’s Economic Injury Disaster Loan Program; Opens on December 19th This is to support businesses that have been hurt by the closure of the bridge.
Matkassian is one of many business owners who applied for the program, which offers loans of up to $2 million at interest rates of 4 percent or less. In early March, he received an email saying he was ineligible.
The reason: “Basically, they said in a very nice way, ‘We don’t need this,'” Matkassian said.
When he was rejected and still wise Governor Dan McKee announces $2.5 million donation A state relief package for small businesses was announced on April 3rd.
The state’s proposal includes $300,000 in direct grants to small businesses leveraging unused federal relief aid from the pandemic. The remaining $2.2 million will go toward technical assistance and beautification for businesses, along with state marketing campaigns and grants to municipalities for signage and sidewalk improvement projects.
“What good will a marketing campaign do for me?” Matkassian asked. “Taxes still remain and expenses have not decreased.”
His lament was echoed by other small business owners, and on April 3, just hours after McKee announced the state’s small business relief plan, he spoke at a House Small Business Committee hearing. Several people expressed their dissatisfaction with the members.
“The state has failed us and we need help to get through this,” Asher Schofield, co-owner of Frog & Toad LLC, said at the hearing. He said, “Small businesses feel they have an unwritten, unspoken contract with the government. This situation is a breach of contract.”
Since the bridge closure, Frog & Toad’s business has declined 5%, resulting in a $20,000 loss in revenue, he said.
“It may not sound like a lot of money, but it’s a lot of money for small businesses,” Schofield said. “That’s an amount we can’t afford to pay our employees.”
Schofield hasn’t applied for an SBA loan because he doesn’t want to take on any more debt. Other business owners he spoke to at Providence’s Hope Street shopping district felt the same way.
For those who applied, the results appear to be mixed.
Rick Simone, executive director of the Federal Hill Association of Commerce and founder of a small business group called the Ocean State Coalition, said about half of the 30 companies he helped apply for were denied.
Simone called the SBA’s disaster loans “a huge failure.”
Among the upset rejects was Jim Verity.
Over the past 42 years, Verity has built a reputation with Verity Design, a niche Providence business specializing in “experiential” design for weddings, birthdays, college events, and more. He received a low-interest loan through the same SBA program during the pandemic.
He was, in his words, “disconcerted” to learn that his company was “more than eligible” for the new loan.
“This is the first time in my business and personal experience that someone has told me my credit score is too good for a loan,” Verity said.
Especially considering the toll the bridge emergency took on his livelihood. Every day brings new stress. Contractors are stuck in traffic for hours waiting to cross the bridge to deliver event decorations. As time goes on, more money comes out of Verity’s books. Clients are canceling work or dropping bookings, choosing instead to work with competitors on “their side” of the bridge.
And Verity expects things to get even worse.
“If they destroy that bridge, our economy will be torn in half,” he said. “We’re going to get hammered.”
Alex Brown, owner of IT’S LIT RI, a major letter rental company, also had his application for an SBA loan denied. He appealed the decision by submitting additional documentation, including employee timesheets and emails from customers canceling work. I was hoping this would help establish the basis of his need.
“I was a little offended,” Brown said of the rejection. “I feel like they didn’t really listen or understand what my business was. We still haven’t seen the full impact of that.”
The SBA does not have data available on the number of businesses that applied for, received, or were denied disaster loans. SBA Office of Disaster Recovery and Resilience spokeswoman Tawhida Mateen said Friday that a software issue is preventing the government from collecting accurate information on applications for either program. Even the previously reported numbers Mateen said it may not have been accurate.
This is the first time in my business and personal experience that I have been told that my credit score is too good for a loan.
– Jim Verity, Owner, Verity Design
Anita Steenson, also a spokeswoman for the SBA, said the agency encouraged businesses denied loans to reconsider. She explained that Steenson declined to comment further and that she could not discuss the reasons for individual loan decisions.
Frustration was mounting by the time McKee turned to state relief programs. Rhode Island Secretary of Commerce Liz Tanner explained the details of each program during an April 3 hearing in the state House of Representatives in an effort to reassure stressed business owners.
“Governor. McKee is a small business-oriented governor,” Tanner said. “He understands the needs of small businesses.”
But for management, the proposed method of distributing funds suggests otherwise.
The maximum amount, $1 million, will be provided as part of Rhode Island Commerce’s existing program of grants to municipalities for sidewalk repairs, signage and other beautification projects. Main Street RI Streetscape Improvement Fund. Another $800,000 will support businesses with technical assistance and “place-making activities” that leverage unused federal pandemic aid. Rhode Island Commerce will repurpose up to $400,000 of existing hotel tax revenue into a marketing campaign to bring attention to area businesses. The final and smallest amount is $300,000 in direct grants, which also leverages unused American Rescue Plan Act funds.
“If we put all that money into actual grants, we wouldn’t need a marketing campaign,” Verity said. “That money will spread through the community like wildfire.”
Rep. Carol McEntee, a South Kingstown Democrat and chair of the House Small Business Committee, also suggested the money would be better spent on grants.
“I don’t know if things like new sidewalks are something businesses are concerned about right now,” she said at the April 3 hearing. “Perhaps they just need money to get through this difficult time, and they don’t need technical assistance.”
Olivia DaRocha, a spokeswoman for Mr. McKee’s office, said in an email Friday that the details of the proposal are still being finalized and must be submitted to the Rhode Island General Assembly for approval.
Changes to the terms of state pandemic assistance require legislative approval. Under the current rules, businesses that opened after the pandemic and have not received other support would be excluded.
The recommendation includes funding as part of the state’s fiscal year 2025 budget, so it will be considered as part of the larger tax and spending plan review typically adopted in late June, House reports. Secretary of State Larry Berman said in an email.
This means business owners will have to wait another two-and-a-half months before applying for state aid, but given the seriousness of the situation, they are not expected to be in much of a hurry.
“Waiting until July sounds like a long time for businesses to continue to tighten,” Schofield said. “We’re a small state. That requires more nimble practices.”
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