By the end of 2020, the Los Angeles branch of the nonprofit financial institution Local Initiatives Support Corp., or LISC, will have distributed roughly $103 million in grants to local small businesses through the L.A. Regional COVID-19 Recovery Fund.The grant program is funded jointly by the city and county of Los Angeles using emergency money from the federal government’s CARES Act. The fund started with a small budget of $3 million, but in September received a $100 million boost comprising $40 million from the city of Los Angeles and $60 million from the county.LISC, which supports development initiatives by providing grants, loans and management and technical support, was tapped to process applications and distribute the money for maximum economic impact.Starting in July, small business owners, microentrepreneurs and nonprofits could apply for grants between $5,000 and $25,000. Sizing was determined by an applicant’s annual income – street vendors and freelancers making less than $100,000 a year, for example, could apply for $5,000 grants.
Applications are now closed, but LISC will process and distribute grants through the end of December.One business owner who benefited from the program is Maricela Guerrero, a Valley resident since emigrating from Mexico in 1998 who owns and operates Cuban restaurant La Taverna Cubana in a Valley Village strip mall at 5424 Laurel Canyon Blvd.Guerrero said the pandemic has wreaked havoc on the restaurant’s bottom line by shuttering the dining room and limiting sales to take-out and delivery channels, forcing her to lay off a waitress and head chef – two of only four employees on her payroll.She added she reached a deal with her landlord to pay half of her monthly rent payments – usually $3,000, now $1,500 – and to defer the other half until the pandemic subsides.Guerrero said she was approved about two months ago for a much-needed forgivable loan of $28,000 through the Paycheck Protection Program. But once she received the money, something bizarre happened.
“Two weeks later, they sent me a notification and told me that they made a mistake. They froze $15,000 for a while and then out of the blue they took it away,” she said.
The Small Business Administration told Guerrero that a processing error had resulted in an overpayment of $15,000 to La Taverna Cubana. The agency took back the excess money.“It was devastating,” she said. “With that money I was able to pay some of my past-due bills, and I was able to pay the only two employees I have.”Luckily, Guerrero’s accountant knew of the L.A. Regional COVID-19 Recovery Fund and advised her to apply. She did, and LISC approved her for a grant of $15,000.
According to LISC Executive Director Tunua Thrash-Ntuk, running the fund presented a tall task.“We give out grants, but not on this scale,” Thrash-Ntuk told the Business Journal. “We had to stand up an entire operation. We did have to hire temporary staff to the tune of almost 40 people. And we did have to look into several technology solutions.”That included creating digital intake portals where applicants could submit documentation, automating the collection of W-9 information, and publishing webinars explaining the grant-making process.
In advertising the L.A. Regional COVID-19 Recovery Fund to businesses, LISC emphasized the importance of supporting businesses that had trouble accessing other forms of aid because of size, type of business, or cultural or language barriers.“Nationally, 96 percent of Black-owned businesses have one or no employees. These are entities that really didn’t get to benefit from a robust PPP package. You have people who have varying levels of documentation, varying levels of command of the English language … and you’ve got a number of people who are sole proprietors,” Thrash-Ntuk said.
To reach those business owners, LISC translated the fund’s website and application portal into 15 languages. It also launched a comprehensive outreach campaign with public relations agency Cerrell Associates in Los Angeles that included digital advertising on streaming platforms, radio and social media as well as direct outreach to business groups, chambers of commerce, local governments and even churches.
That effort evidently worked. Thrash-Ntuk said LISC has received approximately 135,000 applications – far more than it has the capacity to approve.Thrash-Ntuk said LISC is on track to issue around 7,000 grants by the end of the year. That calculates to an average grant size of almost $15,000.
She called the job a “proud endeavor.”“We do it because we know these resources should get to those who need it most right now,” she said.
LISC Manages $103 Million in Business Grants
