MONTGOMERY — Montgomery has only sent out a small amount of the $5 million in federal American Rescue Plan Act (ARPA) funding earmarked for local small businesses, while spending over $1 million on administration, according to one Montgomery small business owner.
There are about eight months left before the remaining $2-3 million in federal funds could possibly have to be sent back to the Department of Treasury due to federal program deadlines.
About $5 million in federal ARPA funds were earmarked for small businesses in Montgomery in 2021. The program, Small Business One Stop Shop (SBOSS), was originally intended to be a grants program for small businesses, but eventually became a half-grant, half-forgivable loan program through Hope Credit Union that hasn't been successful in providing capital to local small businesses.
According to the city of Montgomery's open finance portal, Gaitway Solutions, the managing agency of SBOSS, has been paid $1.16 million since 2024 for SBOSS program management. The president of Gaitway Solutions is Nichole Thompson.
Wade Preston, owner of Prevail Coffee Roasters and Prevail Union in Montgomery, told 1819 News in a recent interview that he'd been keeping an eye on the program since it was first announced by the federal government due to his struggles during the pandemic.
"Both got hit so hard during COVID. We hustled, we fought, we did everything we could to keep the doors open, and we're very proud of the fact that we didn't let go of a single employee during COVID. We found ways to keep the lights on and keep making payroll," Preston said.
Preston said he started becoming concerned about the program's slow implementation. He said he received a $5,000 grant in Atlanta in 2023 for a coffee shop he owns there, before Montgomery had even signed a contract to begin implementing their earmarked funds.
"The ARPA distribution happened in 2021. Now we're all the way into May of 2024 is when the actual contract got executed for Gaitway Solutions and SBOSS as the administrator for the ARPA funds program. The contract that they got was wildly different in scope than the RFP (request for proposal). The RFP was a grants program to distribute grants to small businesses was the central part of the program. It had some administrative and support things in it for sure. The central pillar of the RFP was to distribute grants to small businesses," Preston said. "The entire scope changed and at that point I was very skeptical. I was very skeptical of the program once I saw what they were doing. I was like, 'Man this is not going to work.' As a small business owner and entrepreneur for a decade and a half, going through a loan process is long and it's arduous and there's a lot of details to be sorted out. For businesses that needed assistance, that was going to be a difficult thing first and foremost. Making a struggling small business go into debt in order to access aid money, that just didn't make any sense to me."
Preston said he still applied for funds through SBOSS for both of his businesses. He received an approximately $37,500 half-grant, half-loan through the program for Prevail Union, but was denied a loan for Prevail Coffee Roasters, his wholesale business.
Preston said the $37,500, half of a maximum allowable reward, to his business is the only aid sent to a small business through SBOSS. He said, "The system is failing people around me."
"Think of how many small businesses have closed between 2021 and here we are in 2026, no meaningful amount (deployed). Our cafe getting that half loan to my knowledge is the only aid that has actually gone out to a small business through this whole program. $5 million and $37,500 divided by 2. It hasn't actually been deployed. It's tied to debt right now. $1.76 (million) has gone to SBOSS. My understanding too is $200,000 has gone to Hope Credit Union for services rendered to do the underwriting that didn't amount to anything," Preston said. "You're talking about a program that the first distributions to the city from the federal government went out in 2021. The RFP from the city went out in 2022. There was $5 million earmarked for small business and in a period of essentially from 2021 to April 2026 and in that time not only has no meaningful amount of money gone to small businesses, but half of it is gone, and we don't have any deliverables to account for it. SBOSS can say, 'Oh, we hosted these events and we talked to these people.' I'm sure they've done some good work. I'm sure they've inspired some people to build a business or whatever and given them some templates. Sure, that's fine, but is that worth the fact that now half the money is gone and we have until the end of the year to distribute it? If you couldn't get that money distributed from 2021 to April of 2026, what makes you think that you are going to use the same people and the same vehicles to get it distributed the right way from April 2026 to December of 2026?"
The Montgomery City Council will consider at its meeting on Tuesday night how to alter the program to try to deploy the remaining federal funds before the fast-approaching deadline.
"I see a lot of people saying, 'How are we going to deploy this $2.5 million between now and December?' The first question in my mind there is: what happened to the first $2.5 million? You have to answer that question first," Preston said.
To connect with the author of this story or to comment, email [email protected].
Don't miss out! Subscribe to our newsletter and get our top stories every weekday morning.
