Scott Buchholz, who runs a one-person sawmill operation outside of Dillon, is one of tens of thousands of small business owners in Montana who’ve felt the pandemic pinch their livelihoods this year.

Local ranchers are typically his largest customers, he said in an interview. This spring, though, they weren’t placing their usual orders for fence posts and other supplies, leaving him scraping by on small-dollar orders for home improvement projects. On top of that, his wife, who works at the local hospital, had her hours cut enough that the couple lost their health insurance.

Buchholz said he looked into the Paycheck Protection Program, the banner federal stimulus program that has provided more than 22,000 Montana businesses with forgivable loans. However, he said, a PPP loan would have come with strings attached, and the program was designed more for larger businesses with employees on payroll.

“The money was there, but it was issued through the local bank. And they didn’t even understand how it worked,” he said.

In combination with his ongoing struggle to stay stocked with millable timber, Buchholz said, the situation was enough to have him wondering whether it was time to shut down.

Instead, though, he found relief in a $4,125 grant, issued not by the federal government but by Montana’s Business Stabilization Grant program, a state-administered relief effort designed to help small businesses make ends meet through the crisis.

The grant, Buchholz said, helped him “fill in the blanks” in his business budget, buying wood and equipment like blades for his mill. When a chainsaw failed on him, it meant he could buy a new one instead of scrounging for a used machine or trying to cobble together a fix with spare parts.

Along with a public health care plan and his wife’s unemployment benefits, the grant means his family is in OK shape. 

“It came at the right time to keep my business going,” he said.

Buchholz is far from the only Montana entrepreneur reeling this year as the coronavirus and public health measures intended to contain it have hit what had been the longest economic boom in American history like a sack of bricks. Nationally, 42.2 million Americans were out of work for COVID-19-related reasons as of mid-July, according to the Congressional Research Service.

Congress and President Donald Trump have responded with a massive stimulus push, adding to the federal deficit to fund relief programs administered at both the federal and state levels, including individual stimulus checks, expanded unemployment benefits, and an array of business relief programs.

For example, the Paycheck Protection Program, or PPP, authorized by the March CARES Act, has issued forgivable loans totalling $1.8 billion to almost 24,000 Montana businesses as of Aug. 8, according to data from the U.S. Small Business Administration. Another federal program, the SBA’s Economic Injury Disaster Loans, had provided $521 million in assistance to more than 9,600 Montana businesses as of Aug 14. 

For context, the U.S. Census Bureau estimates that as of 2018 Montana had 38,700 businesses with employees and another 93,800 nonemployer businesses. According to the U.S. Bureau of Economic Analysis, Montana’s 2019 Gross Domestic Product, the total value of goods and services produced by the state economy over the course of the year, was $52 billion.

The CARES Act also routed $1.25 billion in federal funding directly to the state of Montana. That money is available for allocation by Gov. Steve Bullock to pay for public health efforts, help schools and local governments, and fund a Montana-specific suite of relief programs.

Bullock has allocated $357 million of that $1.25 billion to business relief through the stabilization grants and other programs, including efforts targeted at specific economic sectors like agriculture, social service nonprofits and live entertainment. The dollar amount is huge by the standards of the state’s usual economic development spending — the Montana Department of Commerce’s annual budget, in comparison, is only $32 million.

Even so, the state’s business relief efforts pale in comparison to the scale of the federal programs. For example, the amount that has been paid out through the stabilization grants program, $123 million as of Aug. 21, is less than 7% of the total value of PPP assistance received by Montana businesses.

Even so, state officials say their programs are vital components of the relief efforts, because they can meet needs that aren’t addressed by the broad brushstrokes of the federal efforts. Direct grants, they say, offer an alternative to programs like PPP, which requires applicants to work through banks — a hoop that can be a hurdle for businesses that aren’t already working with a lender.

Additionally, while the federal government has said PPP loans can be converted to grants, there has been some confusion over the precise terms under which that assistance is forgivable.

“A loan program is just not going to be a good fit for many, particularly small, businesses in the state,” said Montana Department of Commerce Director Tara Rice.

With $160 million of Montana’s CARES Act money allocated to it, the business stabilization program is the largest state-administered relief program. Businesses of up to 50 employees with losses attributable to the pandemic were initially eligible for grants of up to $10,000, with the cap increased to $20,000 in early August. 

As the program was announced by Rice and Gov. Steve Bullock May 5, Rice said it was intended to deliver aid to small businesses quickly, prioritizing those that hadn’t been able to get help from the federal programs. 

“So many businesses in the state right now are struggling to keep it together and make ends meet,” Rice said. “It’s really designed to be something that’s simple and something they can access with speed.”

The program saw immediate demand. The day the application form went live, May 7, the commerce department received 3,847 requests for business stabilization grants, according to data provided to MTFP. The following day saw another 948. By the end of May, 6,925 businesses had asked for help.

Payments issued through the program have come more slowly, with 1,683 issued by the end of May. That has led some Republicans to criticize Bullock, a Democrat, on the grounds that his administration dragged its heels getting money from the stabilization grants and other relief fund programs out the door.

One of the governor’s critics is U.S. Sen. Steve Daines, who helped negotiate the CARES Act as part of Montana’s congressional delegation and is facing a challenge from Bullock in this fall’s election.

At a virtual Senate debate Aug. 10, Daines said he had pushed to include the direct monetary aid for Montana and other states in the CARES Act under the logic that state governments are best positioned to make wise decisions about relief spending.

“I believe the state can more efficiently and effectively deploy those resources than the federal government,” he said.

Even so, as he competes with the governor who is responsible for orchestrating that deployment, Daines has gone on the attack.

“The governor is sitting on over a billion dollars. That money needs to be deployed to our communities, to our counties, to every corner of our state,” Daines said at the debate. “I’m not sure if he thinks there’s an advantage to hoarding it — it needs to get out quickly because Montanans are hurting. That’s why we were so generous.”

Bullock countered by arguing he’d already allocated the lion’s share of the money to specific programs, sidestepping the question of how much of each program’s allocation has actually been paid to businesses and other recipients. He also said he’s working with Montana’s business community to understand its relief needs, and that he’s holding some of the $1.25 billion in reserve in case it’s needed later this year.

“This pandemic’s not going away, and we want to use this money wisely,” Bullock said.

For their part, commerce officials say that processing thousands of applications for the stabilization grants and other programs represents a tremendous logistical challenge for the department, which says it issued only 347 grants in total last year. At times this summer, the commerce department has issued more grants than that on a daily basis.

In order to manage the deluge, Rice said, the department reassigned its own staff and pulled as many as 60 workers at a time from other state agencies to help with grant review.

“The number of nights and weekends that have been given to this has just been extraordinary,” she said.

The commerce department says the stabilization grants, which businesses can request through a web-based application form, have been awarded on a first-come, first-served basis, though grant reviewers initially prioritized applications from businesses that said they hadn’t already gotten help from the paycheck protection or disaster loan programs. 

The department’s challenge, Rice said, is that commerce staff are obligated to verify each application to ensure it comes from a legitimate business that meets the program’s award criteria, as opposed to an unqualified applicant or someone looking to defraud the assistance program.

“There’s some minimum of process that’s required to ensure that the dollars are administered responsibly,” Rice said. “So that’s the reason you can’t, just the next morning, write checks.”

The stabilization grant program’s beneficiary list includes at least four small-business owners who sat on a task force appointed by the governor to offer advice on how the $1.25 billion coronavirus relief fund should be spent: Fly FisHer Adventures owner Shalon Hastings, of Helena; Red Oxx Manufacturing owner Jim Markel, of Billings; Big Dipper Billings Ice Cream owner Charlie Beaton, of Missoula; and The Base Camp outdoor store owner Scott Brown, of Billings. Markel and Brown each received $10,000 grants for their businesses, while Hastings and Beaton received $5,000 and $3,669, respectively, according to state records.

At least one sitting lawmaker, Republican Sen. Roger Webb, also received a business stabilization grant. Webb, who runs a Billings-based real estate company with his wife, Peggy, who is also a state representative, is listed in state records as having received a $10,000 business stabilization grant.

“Every application that came in the door went through the same review process, regardless of whether you’re a member of that advisory committee or a sitting legislator,” said department spokeswoman Emilie Ritter Saunders.

Another of  the business stabilization program’s beneficiaries is Keenan’s Jewelry in Butte. Co-owner Rhonda Lee said last week that the coronavirus shut her shop down for nearly three months, a span including the Mother’s-Day-and-graduation period that’s her second-busiest season after the winter holidays. She estimates she lost 30% of her business for the year.

Lee was able to pay her staff for the first month of the shutdown, she said, then furloughed them, allowing her employees to pursue unemployment assistance.

She looked into the Paycheck Protection Program, Lee said, but decided against applying, in part because she didn’t initially expect the shutdown to last so long, and in part because she was worried about being able to successfully get a PPP loan converted to a grant.

“I didn’t know what kind of hoops we were going to have to jump through when it was all said and done to get it forgiven,” she said.

A $10,000 business stabilization grant from the state has helped, Lee said, saving her from last-ditch measures like liquidating some of her inventory.

“I wasn’t at the desperation point where I wouldn’t have survived without it,” Lee said. “But it definitely made it a little less stressful.”

Now reopened, Lee’s shop is currently down two employees from her pre-pandemic level of five — one who moved out of state, and one who chose to take early retirement in light of health concerns about working a retail job with COVID-19 still spreading. As a result, she said, she’s looking to hire new help.

On Aug. 12, Bullock announced that businesses can apply for a second round of business stabilization funding, bringing the per-business maximum to $20,000 and the program’s total allocation to $160 million. The commerce department said Aug. 21 it had issued second-round funding to nearly 6,000 businesses in a single day, bringing the total amount distributed through the program to $123 million.

The department has posted a complete list of grant awards on an online dashboard, but hasn’t included much of the information it obtained from businesses as part of the application process, including business owners’ names, pre-pandemic employee counts, and whether businesses reported receiving COVID relief from other sources. Montana Free Press obtained more complete information through a public records request, paying a $552.57 fee for the department’s staff time to process the request.

MTFP’s analysis of that broader data, which is current through Aug. 2, indicates that the stabilization grant program has provided aid to thousands of the state’s smallest businesses, many of whose application materials described being unable to access the federal relief programs.

Of the 7,599 stabilization grants awarded by Aug. 2, 72% went to businesses with five or fewer employees. Additionally, while 82% of stabilization grant recipients with more than five employees said they had also received a PPP loan, only 37% of smaller businesses did. For one-person businesses, the figure was even lower, 22%.

Like Buchholz and Lee, Scott Hopkins of Dillon said he didn’t see the federal relief programs as an option for his sole proprietor construction company, which specializes in flooring and handicap-accessible shower installation.

The pandemic’s arrival, Hopkins said, put him in a particularly tight spot, since he had just recently taken the leap from working for other tradesmen as a subcontractor to striking out on his own.

While he was working seven days a week and booked months out during last year’s construction season, Hopkins said, calls from potential clients dried up when the pandemic hit, putting him out of work entirely during the lockdown. Now, he said, even with business picking up again, he has only a month of jobs lined up.

“It’s stressful, I don’t know what’s going to happen in November, December,” he said. “I’m still working, thank God, but…” 

Hopkins heard about the business stabilization grant program from a credit union where he was applying for a car loan, he said. The loan officer there helped him fill out the application form.

He had considered the federal relief programs, Hopkins said, but as a 26-year-old who doesn’t have great credit and was just starting his business, he didn’t seem to qualify for enough assistance to make a difference.

The state program, though, provided him with a $10,000 grant, giving him the reserves to buy tools and materials without asking clients for an advance. Without the grant, he thinks he probably would have had to close his business and seek work elsewhere, or possibly apply for unemployment.

Instead, he’s feeling more optimistic about being able to make his ends meet. He recently put in for the second round of assistance, he said last week, and had his fingers crossed.

“If I get that, hopefully that will get me through the winter,” he said.

Disclosure: MTFP, a 501(c)(3) nonprofit, received a $10,000 grant through Montana’s Social Services Nonprofit Grant Program, which is also funded through the state’s coronavirus relief fund. 


This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication on issues, trends, and values of importance to Montanans. Discuss MTFP’s Long Streets work with Lead Reporter Eric Dietrich at

Eric came to journalism in a roundabout way after studying engineering at Montana State University in Bozeman (credit, or blame, for his career direction rests with the campus's student newspaper, the Exponent). He has worked as a professional journalist in Montana since 2013, with stints at the Great Falls Tribune, Bozeman Daily Chronicle, and Solutions Journalism Network before joining the Montana Free Press newsroom in Helena full time in 2019.