Small businesses leverage WEDC’s SB2020 grant program

Last updated on July 16th, 2020 at 01:14 pm

The Wisconsin Economic Development Corp. dispersed 763 grants totaling a little over $5 million to help small businesses weather the economic impact of COVID-19.

The Small Business 2020 grants, which maxed out at $20,000, were distributed through eight Community Development Institutions across the state. The grants were dedicated to businesses with less than 20 employees and averaged nearly $9,000 per business, according to the WEDC.

Sip & Purr Cat Cafe owner Katy McHugh (pictured) used grant money to add a retail section to the business where cat supplies will be sold.

Despite receiving economic support from state and federal government programs, local businesses have found that financial aid in and of itself is not the sole solution. Some businesses have pivoted to generate new income while others are still searching for new opportunities.

Sip & Purr Cat Café on Milwaukee’s Lower East Side received a SB2020 grant. The company closed in March but reopened in June under the city’s 25 percent capacity mandate. Café owner Katy McHugh said she considers herself extremely fortunate given the amount of community and financial support she has received.

“It’s hard to even tell right now what the amount of support should be to keep these businesses afloat because it’s so new and we’re not far into this,” McHugh said. “We’ve only been back in business now for just over a month.”

In addition to the SB2020 grant, McHugh received the Economic Injury Disaster Loan $10,000 cash advance, which she is using to prepare for another shutdown. Sip & Purr recently added a retail section with cat supplies, which now makes the business “essential.”

“If a shutdown comes again, we’ll continue to adopt cats, get people in the door to buy cat supplies because that’s essential, and then we’ll keep our coffee bar open,” McHugh said.

She says the business has a significant financial cushion and is currently breaking even. However, McHugh noted that others may not be as fortunate, especially those facing rent or mortgage payments even though their business is operating far below capacity.

“When the shutdown happened and we all had to close, the landlords, electricity companies, insurance companies, the vendors, they were all kind of forgiving,” McHugh said. “‘Pay us what you can and if it’s late you won’t get charged for deferment.’ But that’s not the story anymore.”

Daddy’s Soul Food & Grille on Milwaukee’s near west side was in the middle of growing its operations when the coronavirus pandemic disrupted the economy. At first, the restaurant was going to postpone its expansion plans, but with PPP, EIDL and WEDC funding, the restaurant still plans to expand its dine-in area and open a second location, said restaurant owner Angela Smith.

Daddy’s was predominantly a dine-in restaurant, but with limited dine-in area, the restaurant turned to delivery and carryout as a solution. Since making the transition, the restaurant has seen a significant increase in sales, Smith said.

“(The pandemic) really made us relook at our business and taught us how to do business in any type of situation,” Smith said. “For example, if we get locked down again, we’ll know how to maneuver through it a little bit better instead of just shutting down.”

Milwaukee screen printer Waterstreet Specialty has been challenged by the pandemic, losing as much as $500,000 in revenue since March. The company primarily prints on glassware with the bar and restaurant industry as well as beer tasting and outdoor events composing a large part of their sales, said Kim Clark, Waterstreet Specialty owner.

Clark received an SB2020 grant as well as the federal government’s Paycheck Protection Program loan, which she used to bring many of her 12 employees back. However, she was pressed to spend PPP funds in an eight-week period to return her employees and still achieve loan forgiveness through the program.

Waterstreet Specialty headquarters in Milwaukee.

When those employees returned, there was little available in the way of work since business had slowed. After eight weeks, those employees were laid off again, she said.
“They were cleaning the shop, pulling weeds and cutting the grass,” Clark said. “They were doing all these things just because I was supposed to be using that money.”

Even with business in a lull, Clark has been pursuing new clients and searching for new ways to put the company’s production facility to work. However, the machinery is specialized for glass-printing so new avenues for business have been limited, she said.

“It’s been tough,” Clark said. “I’m running out of funds, no doubt about it. But I can’t rely on the government to take care of me and I just don’t think it’s their responsibility. If they’re helping out because this is a pandemic, I’m forever grateful for the help they have given us. But I still think, take it wherever we can get it, but we still have to be working harder to make sure we maintain the customers we have and get a few new ones.”

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Brandon Anderegg
Brandon covers startups, technology, manufacturing. He previously worked as a general assignment and court reporter for The Freeman in Waukesha. Brandon graduated from UW-Milwaukee’s journalism, advertising and media studies program with an emphasis in journalism. He enjoys live music, playing guitar and loves to hacky sack.

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