Lt. Governor McKee Criticizes Raimondo for Lack of Small Business Support
Thursday, May 28, 2020
In an interview on GoLocal LIVE Wednesday, Rhode Island Democratic Lt. Governor Dan McKee came out firing at Governor Gina Raimondo and her administration for what he says has been the lack of support for small businesses.
McKee criticized Raimondo for not acting quickly enough to establish loan and grant programs to create a safety net to ensure that small businesses do not fail after being forced to shutter by Raimondo’s executive orders under her emergency powers.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“Every state in the country received some CARES Act money that was designated to the state. In the guidelines - very short guidelines - one of the allowable uses is to help small businesses that have been negatively impacted by the coronavirus,” said McKee.
Businesses on Average Have 27 Days of Cash Flow
McKee warned that the average small business has just 27-days of cash flow, and for many Rhode Island small businesses they have exhausted those funds even if they received the federal Payroll Protection Program (PPP) funds. Many small businesses have been forced to close for more than 60 days while large national retailers have remained able to operate.
While Raimondo and McKee are both Democrats, the Lt. Governor has been noticeably absent from all of Raimondo’s 60 plus press briefings. Only members of Raimondo’s cabinet have appeared with Raimondo onstage before the cameras.
“So we have a lot of flexibility [with federal funds] there's $1.25 billion…there's no reason why you can't put a $100 million of that fund out in a way that can go out...as smaller types of grants, and stagger it so that the priority becomes the businesses who have not been allowed to open,” said McKee.
“[Rhode Island] should react. We should have acted in yesterday to put something in place, otherwise we're going to have an avalanche of business small business failures,” said McKee.
McKee Calls on Small Business Owners to Call Raimondo's Office
McKee said that small business owners should target Raimondo’s office with phone calls.
“The Governor's office should receive a deluge of phone calls saying release those federal dollars that you have the flexibility to release and be real aggressive at it. My belief is you should be targeting it towards the businesses that you clearly can define have been impacted the most -- if you haven't been able to open your business up to this point, you've been impacted,” said McKee.
Commerce Defends Actions
Commerce RI in response to McKee’s criticism said, “We at Commerce have been working tirelessly to get our state’s businesses back up and open in a safe manner. With that in mind, our state never closed the manufacturing and construction sectors and we were first in our part of the region to open non-critical retail and restaurants through outdoor dining. While we always strive to do more – the Administration has done a number of things to support small businesses during this COVID-19 crisis,” said Matt Sheaff, spokesman for Commerce RI.
Commerce identified two funding programs for small businesses:
- Creating a bridge loan program for restaurants and micro-businesses to bridge the gap between the time a business applies for an SBA EIDL loan and when they receive the capital.
- Creating a micro-enterprise stabilization grant program designed to assist small businesses that have been impacted by COVID 19 and who have been left out of the federal stimulus programs to date. The program provided grants of up to $5,000 to qualifying microenterprises.
But the two Commerce programs have provided just a fraction of the dollars McKee says are needed.
“We can to make [small businesses] healthy as we recover in phase 1, phase 2, phase 3 -- so that's that's why I'm proposing both a real strong grant program from the federal dollars. The state has the ability to do it -- the guidelines allow it and we had we've heard very little about how much of an investment is going to be made here,” said McKee.
McKee has called on the state to take two specific actions:
CARES Act Small Business Grant Program: Lt. Governor McKee proposes using a significant portion of Rhode Island’s $1.25 billion federal CARES Act funds to issue grants to help small businesses cover overhead costs such as rent, utilities, state and local taxes and payroll. Qualifying small businesses should be able to apply for the grants on a monthly basis as long as they are unable to reopen or required to limit operations. •
State-guaranteed Small Business Loan Program: Lt. Governor McKee urges the creation of a state-guaranteed loan program in partnership with local financial institutions. The program should allow qualified small businesses to borrow funds on favorable terms including zero-interest or deferred payments.
