Due to the effect of the pandemic on small businesses, the Fairfax County Community Business Partnership (FCCBP) created a loan program earlier in the year to support small businesses. A business owner in Herndon says that a decision made by the Fairfax County Board of Supervisors in regard to these loans is actually hurting small businesses.
Fairfax County Supervisors and County staff funded the loans and helped create the program at FCCBP. On their website, they say that “the value of this loan program will benefit Fairfax County small businesses for many years to come.” David Blufer thinks differently.
Blufer is the COO of SBC Tech Partners, an IT value-added reseller in Herndon, Va. His business was affected by the pandemic, so he decided to apply for the FCCBP loan. He received a micro loan at zero percent with six-year payback terms, which he says, “absolutely helped.”
“We are trying to keep everyone employed and insured and maintain business operations at the same time,” he explains.
Around the same time, another program was released by the Fairfax County Government: the Fairfax RISE (Relief Initiative to Support Employers) program. The website states that the grant will not have to be repaid, and that funds will be allocated based on the number of full-time-equivalent employees. Businesses with 1-10 employees can receive $10,000, 11-25 can receive $15,000, and 26-49 can receive $20,000.
Blufer and his team were beginning to gather documents for the FCCBP micro loan program when they learned of the RISE program and decided to apply as well. According to Blufer, that’s when a contact at the FCCBP told them about the decision made by the Fairfax County Board of Supervisors.
According to his contact at the FCCBP, the Board of Supervisors decided that if a small business qualifies for the Fairfax RISE grant program, they have to pay back the FCCBP loan before they can get the grant. But Blufer says that business owners aren’t being made aware of this decision.
His contact told him that the FCCBP appealed this decision, but the board of economic development felt differently.
“It’s unfair to make a business take time and resources to apply, produce their numbers, and then be told that they won’t be eligible unless they give back a larger sum of money first,” says Blufer. “These programs are supposed to be fair and equitable and they are not fair and equitable.”
Blufer received an email from a staff member at the Board of Supervisors, saying that the package was “clear on that if microloan recipients are selected to receive a grant, they must first repay their loan before receiving a grant,” read the email. “And that loans received through the Microloan Program may not be repaid with grant proceeds.”
The email continued, “Fairfax County has required that those few lucky businesses who were randomly selected for both programs only participate in one program.”
“I am very disappointed that Fairfax County shows how little it thinks of small business,” says Blufer. He makes a distinction between businesses that do $100 million in revenue and those that do $2 million or less. “The truly small businesses. I feel like Fairfax County has never been welcoming to [them].”
Blufer wonders how other businesses that have accepted both the loan and the grant are dealing with the decision made by the Board of Supervisors.
Chairman Jeff McKay explains that “if you choose to accept the microloan you must pay it back in full. This is indicated in question number 38 of the grant application.” However, he says that business owners “are able to choose not to continue with the microloan in the case they preferred to move forward with the grant program.”
McKay emphasizes that he is committed to helping businesses as much as possible during this crisis. “I understand that neither the microloan nor grant programs will fully offset the economic pains that our community is experiencing, but both programs fill a gap in federal aid programs.”
He says that Fairfax County had nearly 6,300 applications for the Fairfax RISE grant and approximately 1,700 for the microloan program, and that the majority of businesses that applied were not selected for a microloan or the grant. “Given the scale of the need by small businesses, I wanted to ensure that we support as many businesses as possible.”
“Myself and my partner have put ourselves on the line to pay this loan back and we’re getting refused a grant. If we were worthy to give a loan, we should be worthy to give a grant,” says Blufer.
“I’m curious with all the folks who are not going to take this funding, because I just can’t imagine they will,” says Blufer. “What happens to the money?”