The era of direct grants to San Antonio’s small businesses from federal pandemic relief funding is largely over.

The City of San Antonio’s fiscal year 2024 budget, approved Thursday, includes roughly $15 million to support small businesses. But unlike in the immediate past, there is little direct funding; much of the money will be spent on indirect, or “ecosystem” support.

Of the total, roughly $10.5 million is American Rescue Plan Act funding, the last of the pot earmarked for small businesses, one of six funding priorities for spending the federal money, developed through public and City Council input.

Including a small amount of supplemental local funding, the total amount earmarked for small businesses was $32.4 million. The money must be spent by the end of 2026.

In 2022, the city awarded $15.6 million in direct “COVID impact” grants to more than 500 local businesses, including $1.35 million for businesses also affected by construction.

That direct relief was considered the first phase of ARPA small business funding, said Brenda Hicks-Sorensen, director of the city’s Economic Development Department (EDD).

“Phase I was intended to get those capital grants out the door,” she said, while phase II, which is underway now, is focused on long-term resiliency for small businesses, built through technical support offered through various existing organizations.

Phase II has included some direct funding. In March, $2.45 million went to 91 businesses impacted by ongoing road construction. EDD initially budgeted $3.75 million for this second round of construction recovery grants, The remainder was reprogrammed to support a 0% loan program administered by LiftFund.

There is also some direct funding available to improve the public face of businesses, via a pair of grant programs: $3 million for façade improvements and $1.25 million for outdoor spaces.

Several organizations that support small businesses received a combination of ARPA money and funding from the city’s general fund.

That includes Lift Fund, which offers loans to high-risk businesses and entrepreneurs who may not be eligible for traditional bank loans. LiftFund, which administered much of the ARPA money granted to small businesses, will receive $613,000 in ARPA funding in FY 2024 for the 0% loan program, as well as $250,000 from the city’s general fund.

Three business development organizations that offer small business services within defined geographical areas will collectively receive $1.2 million in ARPA grants, as well as $617,000 from the general fund:

These organizations offer small businesses technical support, resources and connections to foster small business growth.

The city’s one-stop for small businesses will also be getting a boost.

Separate from approving the budget on Thursday, the City Council authorized three-year, $1.7 million contract with Geekdom to take over Launch SA from LiftFund, which had run the program since it began as Café Commerce in 2012. ARPA funding of $300,000 will be used for “new paint and lighting, updated technology and marketing efforts” for Launch SA.

According to city figures, Launch SA, which is housed in the downtown Central Library, has hosted more 5,600 events and assisted 37,000 clients, who reported via survey a 64% increase in sales, $4.5 million in secured investments and more than 1,000 jobs generated.

Geekdom, the co-working space and startup incubator, has been expanding beyond its tech roots to offer support to more small businesses. CEO Charles Woodin told the San Antonio Report he wants Launch SA to be “the front door for any small business seeking resources in San Antonio, whether that business is a start-up or has been in existence for decades.”

He said Geekdom will begin by surveying existing resources within San Antonio’s small business ecosystem — such as the existing business development organizations — with an eye toward further strengthening the relationships among them. He said he hopes to hire a director to run Launch SA within the next two months.

The city’s budget includes $500,000 for construction mitigation for businesses in 12 zones around San Antonio that will be affected by street closures and other infrastructure work in 2024.

The money won’t be doled out as grants, but will support the city’s Paving the Way program, which offers a tool kit of “contacts, strategies and resources” for businesses.

“We have business outreach specialists who go out and work with businesses, help them get signage, give them referrals, use social media, depending on what their needs are,” said Hicks-Sorensen.

Jalen McKee-Rodriguez (D2) and Marc Whyte (D10) and a handful of other City Council members have signed a memo seeking a permanent construction fund that could include grants, but that proposal has yet to make its way through the council committee or public engagement process.

Tracy Idell Hamilton covers business, labor and the economy for the San Antonio Report.