EDA launches two new programs to aid small businesses
Small businesses are the backbone of the United States economy. In fact, according to the country’s Small Business Administration, there are more than 28 million small businesses in the U.S., which when one does the math, outnumber corporations 1162 to 1.
In an effort to support and grow the small business community in Richfield, the city’s Economic Development Authority (EDA) established two new programs at its January 21 meeting. The first program will provide energy-efficient business grants and the second program will provide small businesses with revolving loans.
Since its founding in January 2018, the EDA has sought to find ways to bolster the small business community in Richfield. In the previous two years, the city’s Community Development Department has researched and explored several possibilities after having discussions with small business owners, area experts and reviewing trends. Eventually, the authority decided to implement an energy efficiency program.
“The Energy Efficiency Business Grant will not only help businesses save money in the long run, it also rewards them for being great environmental stewards,” explained Community Development Director John Stark.
The Energy Efficient Business Grant program will be administered in partnership with the Center for Energy and the Environment and is intended to help small businesses save both money and natural resources by providing them with the necessary funds to make energy-efficient upgrades.
“The grant program is an all-around win that will help Richfield businesses lower their energy costs while benefitting the environment by decreasing their resource usage and making smarter purchasing decisions,” stated Sustainability specialist Rachel Lindholm. “This initiative helps business leaders show other community members how they can do the same at their own business, workplace, or even at home.”
The grant will cover up to 20 percent of the cost of the installation of qualified energy-efficient upgrades for Richfield businesses up to an amount of $2,500 per business. Other rebates through the utility companies will also be available to offset costs to business owners.
In the first year of the grant, the EDA has budgeted for at least eight businesses to participate in the program.
Getting a line of credit or small business loan can make or break most small businesses. So much so, that in a recent national survey, it was ranked as the number one challenge facing small businesses in the United States. The new Small Business Revolving Loan program aims to make credit access easier for Richfield small businesses.
The program underwriting criteria for the loans will be more lenient than typical small business loans originating at a commercial bank.
The Small Business Revolving Loan program will be administered in partnership with the Metropolitan Consortium of Community Developers (MCCD), who also works with the City of Richfield on its Open to Business initiative.
“Every small business in an investment in our community, so we view the Small Business Revolving Loan Fund as a way of investing in both our local entrepreneurs and in local government,” said Stark.
The EDA would provide up to $15,000 per loan with the MCCD matching or exceeding that amount. Moreover, no more than 25 percent of the loan can be used to cover operating costs, with the remainder of the amount being used for capital and equipment costs.
“The parameters of the new Small Business Revolving Loan program make a lot of sense,” remarked EDA Commissioner Erin Vrieze Daniels. “It is not a bridge loan that is there to enhance someone’s business and help them grow. It is to help establish new businesses in the city.”
In its pilot year, the EDA has allotted up to $60,000 to the Small Business Revolving Loan program.
The interest earned on the loan by the EDA would be reinvested in the program creating a base for future loans.
“Both the Energy Efficient Business Grant and Small Business Revolving Loan programs are a good first step in the EDA creating a stronger environment for small businesses in Richfield,” said EDA Chair Mary Supple. “As a group, we will continue to work with city staff to create additional small business assistance programs in the future.”