The Governor’s Office of Economic Development thought three weeks ago that its SB 192 tranche of $10.5 million in Small Business Economic Disaster Relief loans might last through mid-May; they were off by maybe a week:
All the money has been loaned out from a state fund that was created to help businesses get through the pandemic, and Gov. Kristi Noem said the state probably can’t replenish the fun.
…Two hundred businesses across the state received loans from the program. The amounts range from $5,000 to $75,000. Loan terms are up to 60 months with no payments for the first six months. The loans are interest-free [Seth Tupper, “State Lends All $10.5 Million from Small Business Fund,” SDPB, 2020.05.05].
My casual scan of that list of loan recipients indicates that at least 53 of the recipients are motels, hotels, and other lodging establishments (and that’s based just on looking for obvious company names). Those lodging companies received $3.36 million, 32% of the relief funds. Many of the recipients are franchisees of national chains like Country Inn & Suites, Hampton Inn & Suites, Travelodge, Americinn, and Red Roof Inn. At least 33 restaurants, bars, brewhouses, and recreational facilities received $1.52 million in emergency loans, including Pizza Ranch of Aberdeen, Thunder Road of Watertown, Forell Limousine and Bus Service of Pierre, and Hogie’s Bar and Grill in Glenham.
According to the Small Business Administration, firms in accommodation, food services, arts, entertainment, and recreation with fewer than 500 employees provide 18.0% of all small-business jobs in South Dakota. Firms in those areas with fewer than 250 employees (that was the threshold for our coronavirus business loans) claimed more than 46% of this emergency relief program’s funds.
Update 2020.05.07 07:27 CDT: The latest ADP/Moody’s Analytics report says private employers laid off 20.236 million workers nationwide in April. The leisure and hospitality industry accounted for more than 42% of those job losses.
I think in a very small state like SD, the $ would better serve the citizens by going to mom & pop businesses because it all stays in state. That’s an off the cuff statement. Am I wrong?
Keeping the monies in South Dakota, for South Dakotans, and away from out-of-state name-callers and other rabble-rousers who only want to throw rocks out of jealousy of the Great State of South Dakota is indeed a good idea, Ms. Geelsdottir. You are, ma’am, most correct about the in-state aspect.
Debbo, I do wonder, when we give money to national chains, how much of that money directly benefits South Dakota workers and how much turns over in out-of-state benefits.