Baltimore Gas and Electric and fintech company Hello Alice are partnering to offer local small businesses $20,000 in grants for a third year. Companies have about a month to apply.

The BGE Energizing Small Business grants are focused on businesses run by historically underrepresented groups, and at least 30 will go to those located in neighborhood business districts.

This comes on the heels of two major legal battles over race-focused business grants. Hello Alice and Fearless Fund, a Black women-led venture capital company, were sued last year in separate class action lawsuits.

This month, a federal court blocked Fearless Fund from awarding $20,000 grants exclusively to Black women-owned small businesses. But in late May, a judge in Ohio dismissed the case against Hello Alice over its grant programs for Black entrepreneurs.

“It’s unfortunate that capital for small business has become a political discussion,” said Carolyn Rodz, Hello Alice’s co-founder and CEO. “Small business has historically been the one area that has had bipartisan support, and the idea that any capital for any business is under attack is incredibly frustrating.”

Despite political and legal challenges, Rodz said the company would persist and continue to offer opportunities to small-business owners.

Arion Long, founder of Femly, a period care brand based in Baltimore’s Fells Point neighborhood, was a recipient of the BGE Energizing Small Business grant in 2021. She wanted to expand her customer base and said she used the grant money to develop Femly’s Ecolite “smart dispenser” for restrooms in offices, arenas and universities.

“With this grant, we not only finalized the development of the first one, but we were also able to reserve some of those funds to start the design of our second and third units,” she said. “Today we have four different restroom dispensing options.”

Long launched her company in 2016 but struggled to find funding through the traditional avenues of venture capital and loans from banks to expand the brand.

Rodz said she knows this challenge well. She started Hello Alice in 2017, her third business venture. Hello Alice is a platform that aims to help small businesses gain access to capital.

She said she remembers what it was like to get a grant early on in her entrepreneurship journey — a validating and encouraging experience, she said.

“A grant of $20,000 makes a major difference for a company that is starting out very capital-constrained,” Rodz said. “They can start to make some headway and show a proof of concept. Every bit of grant funding makes a huge difference.”

Long also said grants are vital for small-business owners. But the downfall of affirmative action and reversals on diversity, equity and inclusion programs have put funding streams at risk.

Last year, America First Legal, a conservative legal group, filed a class action lawsuit against Hello Alice over its grant program that, in partnership with Progressive Insurance, would provide $25,000 to 10 Black-owned small businesses to use toward the purchase of a commercial vehicle.

Legal troubles for Hello Alice and Fearless Fund began shortly after American Alliance for Equal Rights, an anti-affirmative action group, won a Supreme Court case against Harvard University and the University of North Carolina that led to the end of affirmative action in higher education.

In Baltimore, small businesses make up 99.2% of all companies in the metro area, according to the Small Business Administration. Since the BGE-Hello Alice grant program started in 2021, it has awarded more than $13 million to over 650 businesses. The program doles out about $2 million twice a year.

To qualify, applicants must be for-profit, operating for at least one year with less than 25 full-time employees, with less than $7 million in gross revenue, and within BGE’s service area of Baltimore City and Baltimore, Anne Arundel, Carroll, Harford and Howard counties.

Grantees also receive access to Hello Alice’s funding tools and resources. Applications are open until July 12.

“Baltimore is a city where our ecosystem is small and vibrant enough that you can really make an impact here,” Long said. “An opportunity like this is vital for growth here in Baltimore.”