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CHESTO MEANS BUSINESS

Advocates press state leaders for small-business assistance

Supporters of small businesses say the federal help simply won’t be enough for many communities

Massachusetts Governor Charlie Baker.Nicolaus Czarnecki/Pool photo

As banks prepare for another mad dash for cash in the second round of the federal Paycheck Protection Program, many advocates for small businesses are preparing for something else: to be left behind. It’s time, they said, for state government to step in and fill the gap.

The PPP, designed to offer forgivable loans to help small businesses through the pandemic, just received an infusion of $310 billion from Congress after a previous well of $349 billion ran dry.

It sure sounds like plenty of money. But it could be gone within days after the program reopens on Monday. And members of the newly created Small Business COVID-19 Response Coalition fear many of the smallest businesses, particularly those in lower-income communities or owned by minorities, will be left out in the cold. Again.

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That’s why this coalition of roughly 80 advocacy and local business groups sent a request to Governor Charlie Baker, Senate President Karen Spilka, and House Speaker Robert DeLeo on Wednesday. The ask: $40 million for grants that would help small businesses, either directly or through community organizations that would provide counsel, and another $110 million that would be distributed in the form of low-cost loans.

It might seem like a crazy time to be begging Beacon Hill for money. No one knows the size of the budget shortfalls in this fiscal year, let alone the next one, that will be caused by the pandemic. But they will be big. Think: billions.

Joe Kriesberg, who is spearheading the effort, argues the Legislature and governor can find the money. Kriesberg leads the Massachusetts Association of Community Development Corporations, which will make its case to lawmakers on Tuesday (remotely, of course) during its annual “lobby day.” Some of this money can be borrowed, he said, and some can come from a new infusion of Community Development Block Grant funds that the state received from the feds.

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In the first round of PPP disbursements, some businesses had an edge: the ones that had longstanding connections with their bankers or relationships with lawyers, accountants and other advisers. In an attempt to address some of these concerns, the US Treasury said on Thursday that it doesn’t want public companies with access to other sources of capital to take advantage of the PPP.

Derek Mitchell, executive director of the Lawrence Partnership, said businesses in gateway cities such as Lawrence might get a little more money in Round 2. But he still expects a big gap for the smallest businesses, and the most vulnerable. In many cases, these businesses are the lifeblood of the communities they serve.

Sure, the next round of PPP funds will include $60 billion to be distributed through “smaller” lenders, essentially those with fewer than $50 billion in assets. However, there’s no guarantee that the money will go to the smallest businesses, or the neediest communities.

Then there are the strings attached to the PPP money, if owners of shuttered businesses want their loans to be forgiven. They would need to hire workers back by June 30. But many of those small-business owners aren’t even sure if they’ll open in time, and many of their displaced employees can make more money by taking unemployment checks instead.

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Segun Idowu, executive director of the Black Economic Council of Massachusetts, said the state simply can’t just rely on the federal aid to help his members and other minority-owned businesses through this tough time. Some cities — Boston, Worcester, and Cambridge among them — are trying to assist, by providing grants to the smallest businesses out of their own federal CDBG allocations. But Idowu said it probably won’t be enough to prevent a mass wave of closures, one with potentially ruinous consequences for lower-income communities.

So will the Legislature be game? It’s hard to know. Spilka offered a brief statement, saying she looks forward to working with federal partners to identify gaps in available programs — namely, the newly replenished PPP — and to advocating for small businesses.

Senator Eric Lesser, co-chair of the Legislature’s economic development committee, said he’s interested in helping. He suggested some form of small-business assistance could be included in an economic development bill under consideration at the State House. That bill might not be done until midsummer, though, and Lesser recognizes the urgency. He said he regularly hears from businesses in his Western Massachusetts district that can’t wait another day.

Job Number One at the State House is public health right now, particularly with COVID-19 in a full surge here. Kriesberg said his coalition doesn’t want to reopen the economy just yet. At the same time, he said, state officials should lay the groundwork to ensure as many small businesses as possible will still be around once the pandemic finally subsides.

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Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.