Lightfoot announces grant program for microbusinesses

Mayor Lori Lightfoot announced a program Tuesday backed by private donations to provide $5,000 grants to microbusinesses affected by the coronavirus.

“This is gonna mean life or death for some of these businesses,” Lightfoot said during a conference call with City Hall reporters.

“We want to push this money out as quickly as possible. We hope to get all of the money out the door by May 11. For some of these businesses, if they don’t get money now, they’re not coming back. It’s really that simple.”

Rosa Escareno, commissioner of the city’s Department of Business Affairs and Consumer Protection, said the average small business in American has about 26 days’ worth of cash on hand. In Englewood, the average cash on hand is roughly six days, she said.

“Our calculation is that, in about half of the areas we have selected, the $5,000 that’s being provided can cover an entire month’s worth of revenue losses. So, we’re hoping that’s gonna have a significant impact in helping some of these businesses survive,” Escareno said.

Plans call for the $5 million Microbusiness Recovery Grant Program to swiftly award up to 1,000 grants to enterprises in low- to moderate-income areas. The city’s Department of Business Affairs and Consumer Protection will administer the program with help from five community organizations.

Applications will be open until May 4. City officials promised the grants will be awarded just a week later, by May 11, under a lottery.

To qualify, businesses within the targeted neighborhoods must have four or fewer employees, less than $250,000 in annual revenue and experienced a 25% decrease in revenue as a result of the COVID-19 outbreak. All recipients must have been in business for at least a year.

The five community groups helping the program are Accion, Chicago Neighborhood Initiatives, the Chicago Urban League, SomerCor and Women’s Business Development Center. Funding is provided by donations to the Chicago Community Trust and the One Chicago Fund.

The program is in addition to the $100 million Chicago Small Business Resiliency Fund that officials said has provided 232 loans, with another 225 in the final stages of approval. The application period for that program closed Friday. Officials said they are working quickly to evaluate the remaining applications.

Lightfoot noted the city’s latest relief program is aimed at businesses primarily owned by minorities and undocumented immigrants who have a “very small, tangential relationship” with a bank if they have a banking relationship at all.

“They don’t qualify for any [federal] support. We’re trying to fill the void,” the mayor said.