In recent months, this column I have advocated for the use of some of the state’s more than $1 billion in Cares Act funding to assist businesses and nonprofits that have been hammered by the pandemic.
Much of the Cares money is earmarked for unemployment benefits that continue to run at record levels. That’s a topic for another day.
The process took a while. Navigating the dos and don’ts of the legislation isn’t easy. Other states launched programs, sometimes with existing funds, an example in Delaware was the HELP program for restaurants and other enterprises that had trouble receiving Payroll Protection and other assistance.
Other states did things on the fly before the details were worked out and Uncle Sam gave the OK.
Finally, a more cautious State of Delaware, with financial assistance from New Castle County, announced the launch a grant program next month that will offer a lifeline without the use of additional debt.
It’s the right approach.
At this point, the anticipated “V” shaped Covid-19 downturn and recovery may look like a W with a modest recovery and modest downturns as businesses dig in for the long haul.Businesses and nonprofits that can deal with this curve will need to improve their balance sheets.
So far, efforts like the Federal Reserve’s Main Street lending program are by some accounts not drawing much activity from bigger banks.Potential borrowers are skittish about taking on additional debt and banks have little appetite for riskier loans, even with some federal backing.
Almost as significant over the long term as the grant option is the $20 million in state broadband internet investments. It’s part of a continuing program to reach rural areas out of the range of ground-based cable systems that depend on high population density.
The urgency for this program comes from the need to enhance remote learning as the process of reopening schools continues.
But that’s not all. The investment will also pay off business development. Small businesses and agribusinesses in rural areas need high-speed access at a modest cost.
Another priority comes in more heavily populated areas with low-income residents are struggling with distance learning and employment. Programs are in place but more needs to be done to narrow the digital divide.
The focus going forward on national, state, and local levels should be on investments that have long-term benefits. The above programs are a step in the right direction. – Doug Rainey, chief content officer.