When Baltimore’s Francis Scott Key Bridge collapsed in March, Jeff Fraley asked a question on the minds of many Baltimore-area business owners: How can he keep the lights on and pay his staff?

Fraley, president of recycling and dumpster service Fraley Corporation, surveyed a variety of federal, state and city programs designed to keep his trucks rolling and his staff employed.

Fraley received a worker retention grant sponsored by the Maryland Department of Labor.

“I felt like it was the quickest and easiest,” Fraley said. “Either my lights were going to go out and we were going to go out of business, or we were going to stay in business and not lose a single employee.”

Fraley also is president of the Baltimore Industrial Group’s board of directors, an organization composed of some 20 Baltimore businesses based out of the port.

Many Port of Baltimore businesses seeking immediate relief tended to favor grants from the state of Maryland or city of Baltimore rather than apply for a disaster relief loan from the U.S. Small Business Administration, according to Capital News Service interviews with Maryland businesses and trade associations.

Some Maryland business owners preferred state over federal aid

Louis Campion, president and CEO of the Maryland Motor Truck Association, Inc., said some businesses are more reluctant to apply for SBA loans.

“I had one member who already had an SBA loan that she had been paying back,” Campion said. “She did not want to apply for an SBA loan now because she already had one from the pandemic, and she’d been paying that off.”

The U.S. Small Business Administration has approved over $123.8 million in Economic Injury Disaster Loans to 2,131 businesses as of Nov. 13. Of the just over 6,058 applicants, 35% have been approved.

SBA loan applicants are evaluated based on their credit scores to determine their capacity to repay loans.

Sue and Shannon Monaghan of Baltimore International Warehousing and Transportation, Inc., echoed Campion.

“There were the two grants that we were eligible for, versus taking out loans that we didn’t know when the money would come back, the loan would stop and we would have to pay it back,” said Shannon Monaghan, executive administrator of the company.

Sue Monaghan, the company’s president and CEO, said they were “immediately offered” a combined $280,000 in grants from the Maryland Department of Labor’s Port of Baltimore Worker Retention Program and the Maryland Department of Commerce’s Port of Baltimore Emergency Business Assistance Program. Both were “easy to access,” she said.

Campion credited state officials for their “incredible responsiveness” in trying to ensure local trucking companies would survive after the collapse of the Key Bridge and continue to bring products into Maryland.

Maryland’s response included various grant programs

Maryland legislators responded swiftly after the bridge collapse. The Protecting Opportunities and Regional Trade (PORT) Act passed two weeks later and included various monetary relief programs for affected businesses and workers. Emergency unemployment insurance, temporary SBA recovery centers and resources for businesses are among the act’s non-monetary actions.

Scott Cowan, president of International Longshoremen’s Association Local #333, said temporary unemployment centers at the port assisted workers in the registration process. He praised the Maryland Department of Labor for going “above and beyond” in their response.

“The community and the state and Baltimore rallied around all the workers from the port, not only my members but the trucking community and the warehouse workers and anybody that was affected by the bridge collapse,” Cowan said. “And to be honest with you, it was a really great thing.”

Maryland State Sen. Johnny Ray Salling, a Baltimore County Republican, sponsored the PORT Act and said the state’s bipartisan response was key to the creation of the grant programs. He represents the Dundalk area of Baltimore County, home to the port, and said the response helped the Longshoremen’s union, local businesses and independent truck drivers.

Salling said the state considered grants to be more “user friendly” for businesses than loans. Salling said state officials worked with port workers to ensure they knew which programs they were eligible for.

“In this emergency situation, we made sure that every worker and every person that was down there or that was part of the port, they weren’t left out,” Salling said. “There were all kinds of outreach through the state and also through private entities, through private companies and groups and nonprofits that were out there.”

The Maryland Department of Labor has handed out $17.7 million in loans through the Port of Baltimore Worker Retention Program, according to state officials. About 44% of applicants were approved, including Fraley, whose company has five employees. He’s “very thankful” for the program.

Administered by the state’s Department of Commerce, the Port of Baltimore Emergency Business Assistance Program provided $10 million in grants to affected businesses. About 41% of business applications were approved, according to data provided to Capital News Service. The City of Baltimore’s smaller wage subsidy program, which awarded $844,000 so far, has a 50% approval rate.

Capital News Service surveyed other state and city agencies about the results of their relief programs. The Department of Housing and Community Development’s Neighborhood BusinessWorks Program provided nearly $6 million in loans and grants to 48 applicants.

Maryland Comptroller Brooke Lierman said her department helped speed the delivery of relief funds by streamlining the application and review processes, and working to prevent fraud through what she called one of the “most sophisticated fraud detection systems in the nation.”

“We did that in a way that allowed the funds under the PORT Act to get to the right people as soon as possible,” Lierman told Capital News Service on Oct. 7.

Lierman’s department also assisted businesses directly through her decision to waive the International Fuel Tax Association levy, a priority for the Maryland Motor Truck Association.

Federal relief was offered through loans

The SBA disaster relief loans are the biggest source of relief, approving $124 billion in loans related to the Key Bridge collapse. But the program started slow for affected businesses in the weeks immediately following the disaster. By May 12, SBA had only approved 108 of the 3,303 applications to its Economic Industry Disaster Loan (EIDL) program, totaling $3.4 million at a time when the state and city were rapidly distributing funds.

The SBA’s slow beginning stems from several factors, such as closer application reviews after the U.S. Senate Committee on Small Business and Entrepreneurship in November 2023 cited “rampant fraud” in the agency’s distribution of COVID-19 relief funds.

“We’re just being a little more careful, and especially in this situation with the collapse of the bridge,” said Rachel Skinner, the public affairs and economic development specialist for the SBA’s Baltimore District Office. “We’re never going to put someone in a position for failure in that we aren’t going to give them a loan if they don’t have the ability to repay that.”

During the COVID-19 pandemic, the federal government used the same type of SBA loan, the EIDL program, to distribute billions of dollars in quick relief to businesses nationwide. There are still billions of dollars in delinquent debt owed to the SBA from small businesses who could not or would not pay back their loans.

The SBA has been proceeding deliberately through the Key Bridge loan applicants. “We are here to help,” Skinner said.

While prospective applicants claiming economic injury from the bridge collapse can apply for a loan or a reconsideration of their application through Dec. 30, the SBA experienced financial strain following Hurricane Milton and Hurricane Helene that may not resolve until Congress is back in session.

Salling is eyeing the federal response.

“I think our biggest concern is that working with our federal partners, we need to move faster,” Salling said. “We need to move in ways where we can get something written in stone, and start with a foundation where we’re going to work with them.”

Capital News Service is a student-powered news organization run by the University of Maryland Philip Merrill College of Journalism. with Capital News Service.