Baker unveils $668 million relief plan to help small businesses

An employee of Carmelina's in the North End of Boston taped up paper in the windows of the restaurant in May. David L. Ryan/Globe Staff

As the most tumultuous holiday shopping season in memory comes to a close, Governor Charlie Baker on Wednesday rolled out a $668 million relief program to small businesses devastated by the coronavirus shutdowns, a lifeline that depends largely on a new federal stimulus bill that President Trump is threatening to veto.

Small businesses that have been hit the hardest would get priority for the money, including restaurants, bars, gyms, and event venues. About half of the funds are expected to go to those shut out of a previous round of state aid that was massively oversubscribed this fall. Those latter businesses do not have to apply again to be considered, and Baker said he expects awards to begin sometime next week.

In announcing the program, Baker acknowledged that the restrictions on businesses he’s imposed because of the virus “have consequences and the impact has serious implications on people’s lives. . . . For us the most important thing is to recognize and understand we have a lot of small businesses that have been struggling through this.”

Under the program, businesses would receive up to $75,000, or three months of operating expenses, to help cover payroll, mortgages, debt, and other bills to help them through the difficult months ahead. The funds would come in the form of grants, which would not need to be repaid. The money would be distributed by a quasi-state agency, the Massachusetts Growth Capital Corp., which will begin accepting new applications on Dec. 31, for two weeks.

Most of the funds for the state grant program would come from the hard-fought bill approved by Congress this week that would provide $900 billion in COVID-19 relief. The legislation also includes $284 billion for loans from the Paycheck Protection Program to bolster small businesses.

Although Trump hasn’t explicitly stated he would veto the legislation in its current form, he has raised objections to the $600 stimulus checks for individuals, saying the amount is too low. His complaints have prompted congressional leaders to hurriedly recanvass members for a possible compromise.

Despite the holdup from Trump, Baker expressed optimism the money from Washington will arrive soon.

“If this whole thing falls apart . . . that makes it a lot more complicated to make the math work,” the governor said at a news conference. “But I am anticipating that this thing is going to get signed and we’ll be able to fully implement this program and support thousands of businesses that really need our help.”

This week, Baker lowered capacity limits for most businesses to 25 percent beginning Saturday, a step he said would last for at least two weeks as the state continues to try to curb the spread of the virus. But restrictions imposed all year have devastated many businesses, and a quarter of restaurants in the state have closed during the pandemic, according to the Massachusetts Restaurant Association.

Baker expects the recipients of the new grants to include restaurants, bars, caterers, indoor recreation facilities and entertainment venues, gyms and fitness centers, event support services such as videographers and photographers, nail salons and barber shops, and other retailers. Companies would have to still be operating, or plan to reopen as the pandemic eases.

Although state officials did not put a limit on the size of businesses that could apply, they made clear that preference would go to Main Street-sized operations; businesses such as retail chains, liquor and marijuana stores, and real estate enterprises would not be eligible.

The timing was important, as businesses close out the holiday shopping push and head into a slower season.

“It’s an important holiday gift to many consumer-serving small businesses, which have been disproportionately injured by government orders, restrictions, and messaging resulting in dramatically lower sales,” Jon Hurst, president of the Retailers Association of Massachusetts said.

The restaurant industry in Massachusetts in particular has been desperate for additional government relief beyond the existing state and federal programs. But many were crestfallen earlier this week when the new federal stimulus bill did not include money specifically set aside for restaurants.

“We are bleeding and we are staying open for our staff so that we can employ them,” said Jody Adams, owner of Trade, Porto, and Saloniki Greek restaurants and a founding member of the Mass. Restaurants United group, which has been working on behalf of independent owners. “I’m just grateful. I feel like after all the hard work we did, we were heard.”

Heather White, chief executive of Boston boutique fitness studio Trillfit, said she applied but did not receive funds from the prior relief fund administered by Mass. Growth Capital. Now that her application will be prioritized in this round, she said “it feels incredible.”

“This will have a direct impact,” White said. “It feels like the administration is finally listening.”

Marc Draisen, executive director of the Metropolitan Area Planning Council, said that months of pressure from municipal leaders lobbying on behalf of small businesses finally got through to Baker.

“We’ve said for a long time that restrictions and small business support need to go hand in glove,” he said.

Draisen praised the size and scope of the program, saying it provides an opportunity to support “thousands or tens of thousands of small businesses,” in particular with grants, not loans, that do not have to be paid back.

Local municipal leaders added their praise of Baker.

“I’m glad he’s working with municipalities, hearing these concerns, and understanding the important role [small businesses] play in the foundation of the economy,” said Somerville Mayor Joseph Curtatone.

Restaurant industry veterans don’t expect the new round of PPP loans to be all that helpful to them, especially as winter settles in and outdoor dining is all but gone from the scene for most until April. Some are hesitant to even apply for PPP with dining capacity restrictions still in place, because they might be on the hook to repay the funds while business is still depressed.

“To take another round of PPP feels really dangerous to me,” said Nancy Caswell, owner of Oak + Rowan in Boston and Brine on the North Shore. “I probably wouldn’t even tough it out, out of fear of having to pay it back.”

Which is why the state-level grant funding could be a game changer for the industry.

“If we have any hope of getting people to the other side of this, we’re going to need Massachusetts to help us,” said Bob Luz, chief executive of the statewide restaurant association. “This plan from D.C. is just not enough.”

Meanwhile, other relief measures restaurants have been hoping for remain mired in the Massachusetts Legislature.

For instance, independent restaurants have been pushing Beacon Hill to pass a cap on third-party delivery fees by such as DoorDash and UberEats. Restaurant owners say the fees, as high as 30 percent in some cases, eat up a big slice of their profits — to the point where they sometimes even lose money on orders. The proposed cap is included in a giant economic development bill that has been stuck in conference negotiations between the House and Senate since summer.

Such caps have been imposed in several other places. Last month, Washington Governor Jay Inslee capped delivery fees at 15 percent, while Seattle had already put a 15 percent limit in place over the summer. In Minneapolis, the mayor this week signed an emergency regulation setting the same cap.

Jon Chesto and Victoria McGrane of the Globe staff contributed to this report.

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