Richmond converts small business loans to grants

Five years ago, when Sandi Cauley opened her boutique fitness business, Turn Cardio Jam Studio, she did so on her own dime — not wanting to be strapped to loans and investors. But after the pandemic hit, she needed outside help to keep her business afloat.

After she had trouble securing a Paycheck Protection Program loan, Cauley turned to the city of Richmond, which in April launched a $1 million small business disaster loan program offering up to $20,000 to businesses within city limits. Forty-eight grants totaling nearly $935,000 were approved by August.

Cautious about interest rates, Cauley worked with the city to secure a conservative loan amount in case her business went under. But the stress of paying off the loan melted away in late July when the Richmond Economic Development Authority converted the loans into grants. In late August, the city launched another initiative, the $3 million Richmond Recovers Grant Program to aid small businesses and nonprofits. Both programs were funded by the $20.1 million the city received via the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“I can’t say enough what a relief it is,” Cauley says about the loan being converted into a grant. “I didn’t want that hanging over my head.”

Cauley has been able to pay her utility bills and her staff, as well as purchase equipment for virtual classes.

“It really did carry us — and still is carrying us,” says Cauley, whose Scott’s Addition gym also offers small, physically distanced in-person workouts.

Some of Richmond CPA Nadia S. Anderson’s clients “didn’t miss a beat,” but others had to end their business relationship with her to make ends meet. She also has an event-planning business, Virginia Grace, which effectively dissolved during the pandemic, taking away about a third of her income.

With her assistance grant from the city, Anderson was able to pay her independent contractors and fill her own income gap. She also learned a valuable lesson about accepting help from others, even when she felt ambivalent about taking out a loan.

“There are a lot of small business owners who believe that being a small business owner means that you have to do everything yourself,” Anderson says. “[I encourage] people to make sure, as a small business owner, that you’re tuned in and that you … understand your business … so that when something changes you’re able to sustain and to recover.”

Subscribe to Virginia Business.

Get our daily e-newsletter.