Detroit small businesses score grants to survive COVID-19 crisis

Mashelle Sykes

One Detroiter who expressed concern about her business’ survival during the early days of the COVID-19 crisis has secured a $5,000 grant designed to help her survive a state government-mandated partial closure.

Regina Gaines owns House of Pure Vin, a wine destination shop that opened five years ago in downtown Detroit. She told the Advance she was pleased to have secured the grant. 

“For me, this helps to give me a little more room to breathe, so I can figure out what this plan is going to look like for us,” Gaines said. “I not only have to plan on how to maintain but I have to plan on what type of programing I going to do [moving forward.]”

Gaines is a recipient of a grant provided by TechTown’s Detroit Small Business Stabilization Fund. On Thursday, the nonprofit business incubator awarded $606,000 to 350 Detroit small businesses. It comes after Gov. Gretchen Whitmer on March 16 ordered all Michigan restaurants and bars close and only offer take out due to the spread of COVID-19, followed shortly thereafter by a “stay at home” order. 

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Within days, the fund was created in partnership with the city of Detroit, the Detroit Economic Growth Corp. (DEGC), and Invest Detroit to provide working capital grants to some of the city’s most vulnerable businesses facing the crisis. TechTown began accepting applications on March 20 for grants up to $5,000 each for qualifying businesses. By Wednesday, award notifications were sent to 350 businesses, with fund deployment scheduled to be completed by Wednesday, April 8.

“In a crisis like this, speed is key,” said TechTown CEO Ned Staebler. “The reality is that most small businesses don’t have significant cash reserves. In order to preserve the deeply rooted small business community we have in Detroit, we knew we needed to support them immediately. Our community has stepped up in a huge way to do that.”

Small businesses located in African-American and Latino communities are less profitable, and have less liquidity than comparable establishments in white neighborhoods, according to a 2019 JPMorgan Chase Institute report. In all majority Black or Hispanic communities, most small businesses had fewer than twenty-one cash buffer days.

The TechTown Fund was supplied by several donors, including Quicken Loans Community Fund, Desai Sethi Family Foundation, DTE Energy Foundation, Google, Invest Detroit, JPMorgan Chase, the Ralph C. Wilson, Jr. Foundation, as well as 113 individual donors.

Awardees contribute a combined total of almost 1,700 jobs, of which more than 1,400 are filled by Detroit residents, TechTown said. The majority of businesses awarded are minority-owned and/or female-owned. 

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They include retail, restaurants, childcare facilities, and hair salons, such as the Food Exchange Restaurant LLC, Detroit Artists’ Test Lab, Source Booksellers, Guadalajara #2 Inc., Norma G’s, Good Cakes and Bakes, Rincon Tropical, Narrow Way Cafe, and the Kitchen by Cooking with Que.

“We didn’t know this was going to happen and had to close so suddenly, said Mashelle Sykes, founder and operator of Fusion Flare Kitchen and Cocktails located on the city’s west side. “The funds helped us pay the electric bill, insurance and payroll. I am so grateful.”

Meanwhile, the Whitmer administration announced on Friday that businesses across the state are now able to apply for $349 billion in Paycheck Protection Program (PPP) forgivable loans through the U.S. Small Business Administration. 

Through a new website, businesses are provided key resources to assist with the PPP application, the loan process and strategies to ensure the greatest amount of funding for economic relief.

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“All across Michigan, small businesses and families are doing their part to mitigate the spread of COVID-19, but this unprecedented time has, understandably, created uncertainty for many employers,” Lt. Gov. Garlin Gilchrist said. “The Paycheck Protection Program offers much-needed financial support for our small businesses and their workers to help them get through this tough time.”

The website was launched as a collaboration between the Small Business Association of Michigan (SBAM), Michigan Association of Certified Public Accountants (MICPA), the Michigan Economic Development Corporation and the Michigan SBDC and includes key eligibility information, videos and instructions to help with the application process, information on authorized SBA lenders and more.

“Small businesses are the lifeblood of our economy and the Paycheck Protection Program is a lifeline,” said former Lt. Gov. Brian Calley, now SBAM president. “These loans, much of which may be forgivable, are just what we need to get Michigan’s economy rolling as long as businesses apply.”

Ken Coleman
Ken Coleman covers Southeast Michigan, economic justice and civil rights. He is a former Michigan Chronicle senior editor and served as the American Black Journal segment host on Detroit Public Television. He has written and published four books on black life in Detroit, including Soul on Air: Blacks Who Helped to Define Radio in Detroit and Forever Young: A Coleman Reader. His work has been cited by the Detroit News, Detroit Free Press, History Channel and CNN. Additionally, he was an essayist for the award-winning book, Detroit 1967: Origins, Impacts, Legacies. Ken has served as a spokesperson for the Michigan Democratic Party, Detroit Public Schools, U.S. Sen. Gary Peters and U.S. Rep. Brenda Lawrence. Previously to joining the Advance, he worked for the Detroit Federation of Teachers as a communications specialist. He is a Historical Society of Michigan trustee and a Big Brothers Big Sisters of Metropolitan Detroit advisory board member.