Economic Development Authority creates small business loan program
Forgivable Loans for businesses impacted by COVID-19
Richfield, Minn. (April 22, 2020) – According to a recent study conducted by the National Federation of Independent Business, 80 percent of small employers are experiencing slower sales, 31 percent are experiencing supply chain disruption and 23 percent report concerns about sick employees. The country’s small businesses are some of the hardest hit by the novel coronavirus (COVID-19) pandemic.
At the beginning of April, the U.S. Small Business Administration started distributing $10,000 disaster grants to aid some of the country’s smallest employers during the public health crisis. But for many businesses these grants will not be enough to see them through the pandemic.
“Businesses of all shapes and sizes are seeing a drastic reduction in income during the COVID-19 pandemic,” stated Richfield Chamber of Commerce Chairman Greg Worthen. “Richfield is the first city I have heard of that is willing to help its small businesses through this crisis in the form of a forgivable loan program. The program shows what a business-friendly community Richfield is.”
In an effort to support Richfield’s small business community, the city’s Economic Development Authority (EDA) created a COVID-19 Small Business Assistance Forgivable Loan Program.
“The federal and state-level programs are focusing most of their resources on large and medium-sized businesses,” advised EDA Chair Mary Supple. “If we want to have a healthy and diverse local economy, we need businesses of all sizes. The creation of the COVID-19 Small Business Assistance Forgivable Loan Program will provide much needed assistance to the city’s businesses to weather this unprecedented public health crisis.”
Details of the Small Business Assistance Forgivable Loan Program include:
$2,500 for the first employee and $500 for each additional employee up to $7,500
Available to businesses that have operated in Richfield for at least one year
Businesses forced to shut down the earliest and those impacted the most are given preference
Loans carry a zero percent interest rate until December 31, 2021
Up to 50 percent of the loan is forgivable in 2020 if the business can demonstrate expenditures on staffing, COVID-19 related expenses or visible capital improvements
Up to 50 percent of the loan is forgivable in 2021 if the business reestablishes itself
Richfield’s EDA was formed in 2018 to support projects and create new programs to help bolster the local economy. In its first two years, the EDA collected a tax levy, but choose to accumulate the majority of those funds in a reserve fund for unforeseen needs or opportunities. This good financial planning is now permitting the EDA to provide $150,000 for the COVID-19 Small Business Forgivable Loan.
Loan applications should be available to interested businesses by the end of the week.
For more information, visit: www.richfieldmn.gov/departments/community-development/economic-development/covid-19-resources-for-businesses/