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Business owners frustrated at pace of coronavirus grants

December 30, 2020 GMT

SIOUX FALLS, S.D. (AP) — As an initial deadline passed Wednesday for South Dakota’s $450 million grant program to help small businesses upended by the pandemic, fewer than 20% of nearly 6,000 applicants have seen any money.

The deadline has been extended by the federal government, but some business owners expressed frustration at what they described as snags in the application process and a monthslong wait for the grants.

The grant program is a cornerstone of Republican Gov. Kristi Noem’s plan to spend $1.25 billion in federal coronavirus money, sending nearly a third to small businesses, startups and nonprofits that can show they have been hurt financially by the pandemic. But from bed and breakfasts in Sioux Falls to rodeo operators in Pierre, business owners have been left waiting for word on relief as they try to adapt to the economic uncertainty and shape plans for next year.

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“It’s so sad. I mean, I’m drowning,” said Michael Haskett, who owns a Sioux Falls cafe.

He’s among the few whose applications have been processed. He received just over $10,000 last week and was waiting to hear on his application for a second round of grants the governor opened on Dec. 11. But Haskett has not heard of anyone else in the Sioux Falls restaurant business who has received funds.

“Restaurants in the best of times, we make razor-thin margins,” he said. “Right now, we’re losing. We’re losing hard.”

Haskett began his application once the first round of grants opened in October. At that time, a surge of coronavirus infections was gaining force in South Dakota. The $450 million program, which the Legislature endorsed, promised to give a boost to small businesses that could show a downturn from last year. The state’s economy had weathered the pandemic relatively well compared with other states — something Noem has emphasized to defend her decision to forgo business closures or restrictions on bars and restaurants.

Business owners like Haskett said they have still seen big reductions in business, especially when cases surged in November. More recently, the average number of daily cases dropped by 43% over the last two weeks, according to Johns Hopkins researchers. Health officials reported a small uptick Wednesday, reporting 562 new positive cases and 18 deaths from COVID-19.

“I don’t like getting a handout, but I also don’t want people getting sick,” Haskett said, describing how he had cut hours and seating capacity at his cafe.

The state’s Bureau of Finance and Management, to implement the program, signed a $6 million contract with Guidehouse Inc., a Virginia-based technology consultant.

Sen. Reynold Nesiba, a Democrat from Sioux Falls, said he was “deeply disappointed and frustrated” with the company after hearing about the delays and technical snags.

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Guidehouse did not immediately respond to a request for comment on the program.

The Bureau of Finance and Management has reported that just 16%, or 951 out of 5,912, small businesses, startups and nonprofits that applied have received a total of about $86 million. The state initially faced a deadline Wednesday set by Congress to allocate all the funds, but that was extended through next year when President Donald Trump signed a pandemic relief package bill on Sunday.

“I think there were a lot of nuances that were hard to anticipate when they were putting the program together in October,” said Nathan Sanderson, the director of the South Dakota Retailers Association.

He said the delays were caused by holdups like explaining ownership changes or gathering the right paperwork.

Liza Clark, commissioner of the Bureau of Finance and Management, told lawmakers in November that many businesses had not answered emails requesting to fix errors in their applications and worried that emails could have been lost in their spam folders.

But Brie Korkow, who operates a rodeo business near Pierre, said she diligently checked her email and began calling the program’s helpline every few days for updates. She had to make a few corrections to her application that she felt should have been easy to catch by a better-designed process.

Other business owners, such as Karen Johnson who operates a bed and breakfast in Sioux Falls, said they were asked to correct errors that they had not made.

Korkow was grateful for the prospect of help and said she was “proud” of how South Dakota had approached the pandemic. But she felt frustrated trying to plan for the uncertain economic prospects of next year, while still trying to repay government loans she received in the spring.

“You don’t want to have to get so desperate that you’re going to have to go sell some good bucking horses or good bucking bulls to make ends meet,” she said.

Rep. Chris Karr, a Sioux Falls Republican, said Guidehouse has increased its staff on the project. He said using a contractor was the best way to implement a large program in a matter of months.

Still, he said that as a business owner himself, he understood the frustration.

“Every dollar counts and every day counts,” he said.