Phoenix Program Aims to Help Small Businesses Survive Big Construction

Phoenix Program Aims to Help Small Businesses Survive Big Construction
Phoenix Program Aims to Help Small Businesses Survive Big Construction

Whether the customers came for the Pollo Peño or the chino fries with seaweed topping, the new light rail construction made it difficult to reach the family-run fusion restaurant Chino-Mex on South Central Avenue in Phoenix.

For Carlos Castillo, the owner of the restaurant, the construction in connection with the COVID-19 pandemic threatened his two-year-old business.

However, he has received financial help from the Small Business Financial Assistance Program (SBFAP), which was launched last January by the City of Phoenix and Valley Metro, the regional public transportation authority.

“It helps with payroll,” says Castillo. Although his restaurant is not right next to the rail project, it affects his business. “Sometimes there are no left or right turns, so it takes longer to get to the restaurant. They keep changing the light or closing entrances. ”As a result, guests have to find new ways to get to the restaurant in order to avoid the construction work that began in summer 2020.

The one-year pilot program, administered by Prestamos CDFI, LLC, is funded by both the city and the Phoenix Community Development & Investment Corporation. The grants are offered to small businesses affected by Valley Metro’s Northwest Extension Phase II and South Central Extension / Downtown Hub light rail projects.

Valley Metro and the City of Phoenix have hired Prestamos to interview the companies, determine eligibility and help them with the application process Website.

“We opened the application process in mid-March this year and started receiving applications primarily in April and May,” said Terry Gruver, Community Relations for Valley Metro. “The aim is to help companies maintain and overcome the effects of construction work in their area. One of the goals is to help businesses that rely on pedestrian traffic – customers coming through the door as opposed to a call center. ”

The South Central Extension is a five-mile stretch that will connect South Phoenix to the regional light rail system. This area in particular has more small businesses, many of which are minority or women owned. “So that was really the focus when the city put the funding together; to really help the more vulnerable businesses that are more locally owned, ”says Gruver. In addition, the program’s administrator had to demonstrate bilingual skills and an understanding of the communities that would be affected and need to be served – qualities Prestamos possessed.

Since the program began, $ 253,000 of up to $ 9,000 has been distributed to 50 companies, says Susan Tierney, communications manager at Valley Metro. So far, this makes up a small percentage of companies affected – according to Tierney, there are 566 companies along Northwest Extension Phase II and the South Central Extension / Downtown Hub, as well as at least one local company Recently, the construction of the light rail was cited as the main factor behind its closure – but not all companies are eligible. Must be earning less than $ 500,000, be locally owned, and have 15 or fewer employees. The grant money these companies receive can be used for business expenses such as rent or mortgage payments, operating expenses, insurance, and payroll. It cannot be used to pay taxes.

“We know it’s challenging for companies to be in an area where business is disrupted,” says Tierney.

When the program ends in early 2022, Gruver said the City and Valley Metro plan to review the program’s effectiveness and see if there are areas that can be improved.

But for Castillo, who is originally from Mexico, the money that came in via Prestamos made a huge difference. “They guided me through the application and it was very easy,” he says. “[Without the grant] we would be gone a long time ago. ”

This story is part of our CDFI Futures series, which examines the community development finance industry through the perspective of equity, public policy, and inclusive community development. The series is generously endorsed by Partners for the Common Good. Sign up for the CapNexus newsletter from PCG at

Frances McMorris is a Tampa-based writer who worked as a court and legal reporter for the Wall Street Journal, New York Daily News, and Newsday. She specializes in legal and business issues.