State keeps tweaking AK CARES as rollout remains slow

Additional small businesses will be eligible for more than $155 million in pandemic aid from the State of Alaska Aug. 6 following wholesale changes to the AK CARES grant program, but whether or not the revisions will result in distribution of funds remains to be seen.

Department of Commerce, Community and Economic Development officials announced July 31 that less restrictive eligibility requirements for small businesses to receive the grants would go into effect approximately seven weeks after they were first released.

On Aug. 6, AK CARES grants will also be available to Alaska-based businesses with up to 50 full-time employees that have received $5,000 or less from federal government aid programs such as the Economic Injury Disaster Loan, or EIDL, and Paycheck Protection programs run through the Small Business Administration.

Approximately 11,600 Alaska small businesses had received nearly $1.3 billion in aid through the Paycheck Protection Program as of July 31, according to the SBA.

Commercial fishermen who held a state Commercial Fisheries Entry Commission permit either this year or last and fished in 2019 are also now eligible for the grants of between $5,000 and $100,000, as are 501(c)6 nonprofits, such as local chambers of commerce.

The move to broaden eligibility came after legislators and business leaders said they heard from many small business owners who had taken small federal loans or grants this spring that proved insufficient as the economic conditions brought on by the pandemic continue.

Dunleavy administration officials said some of the prior restrictions, particularly disqualifying businesses that had taken federal assistance, were put in place to assure that more businesses in need of aid would get it at some level.

The AK CARES program was seeded with $290 million of the more than $1.25 billion the state received in federal CARES Act funding this spring and went live June 1. As of Aug. 3 Credit Union 1 — the lender selected to administer the grants — had received 2,542 AK CARES grant applications with requests totaling approximately $114 million; of those, 511 applications totaling about $20 million have been approved, according to the Commerce Department.

Another 136 applications have been approved but the applicants have not opened a free account with CU1 needed to receive the funds, according to Commerce spokeswoman Glenn Hoskinson.

State and CU1 officials have also acknowledged it has taken too long to process the applications and distribute the funds in legislative hearings on the matter, but Commerce Commissioner Julie Anderson said in a statement that the department’s new online application portal, which will be used instead of CU1’s website going forward, should speed it up from the start.

The state’s new AK CARES loan application portal is at

Anderson said evolving federal guidance the state must adhere to for the money has challenged the process, as have incomplete applications and a lack of responsiveness by applicants to address issues with their documents.

“We continue to adapt the program to assist as many businesses as we can, as quickly as we can. I expect to see significant improvements in processing times and the number of businesses we can reach as a result of the program changes,” she said.

Senate President Cathy Giessel, R-Anchorage, said the Legislature is not in a position to micro-manage the aid program and needs to support the Dunleavy administration’s efforts to improve the program; but the slow distribution of funds is largely a reflection of how government agencies typically operate.

“This is simply a mechanical, bureaucratic process that is just slow,” Geissel said in an interview. “I wish it were more smooth.”

Anchorage Economic Development Corp. CEO Bill Popp said the changes are not all he and others were hoping for but they are very important for some business owners that have now faced roughly five months of pandemic impacts — from slower sales to forced closure.

“The timing will be good for many businesses with the uptick in cases. Every little bit helps,” Popp said.

The Municipality of Anchorage has also appropriated $5 million for a second round of pandemic aid grants targeting tourism and hopsitality businesses, nonprofits and arts and culture organizations in addition to the $1 million dispersed earlier this year, according to the mayor's office spokeswoman Carolyn Hall.

A CU1 spokeswoman did not respond to questions in time for this story; however, the Anchorage-based lender sent a long list of the “most commonly missed items” on AK CARES applications or expense schedules to Alaska regional development organization leaders and Commerce officials on July 29.

The 20-issue list highlights missing business incorporation documents; requesting amounts outside the $5,000 to $100,000 limits; a lack of tax forms; and illegible handwriting among some of the problems credit union staff are facing when working with applicants.

Some applicants and other professional observers have said the first application required significant documentation, similar to what would be needed for a large loan application, rather than prioritizing the speed of the process.

Elwood Brehmer can be reached at [email protected].

08/05/2020 - 1:39pm