City seeing fewer loan requests

The second round of a city-funded loan program for small businesses in Columbus impacted by the COVID-19 crisis has gotten off to a slower start than the first round.

As of Tuesday morning, two local small businesses had applied for $50,000 in loans during roughly the first week after the city opened the second round of applications.

By comparison, 15 small businesses applied for loans the first day the city opened the initial round of applications in April.

The program, called Columbus INvigorate, allows small businesses within the Columbus city limits the opportunity to apply for a loan ranging from $5,000 to $25,000. The loans have a six-month deferral of interest and principal payments on the three-year terms. Interest rate after the six-month deferral would be 1%.

The deadline for the second round of applications is Sept. 30. Loan applications will be considered on a first-come first-serve basis, and city officials expect approved funds will be disbursed during the first half of October, said Robin Hilber, assistant director of community development for the city of Columbus.

The two applicants during the second round did not receive any loans during the initial round of applications, said Eric Frey, executive director of Administrative Resources association, a nonprofit governmental association that is administering the program.

“I would say (the number of applications) a little less than I thought, but … last time the closer and closer we get to the date due, it seems like it picks up. I would expect we will see more come in closer to the end of the month,” Frey said.

A total of 43 local small businesses received loans totaling $716,000 from the first round of the program, according to city records. That leaves about $300,000 available of the initial $1 million in city funds that the Columbus City Council approved for the program in April.

To be eligible to apply for the city’s loan program, companies must be located within the Columbus city limits, were in business as of Jan. 1, have fewer than 50 employees, no more than $2 million in gross receipts and show a decline in sales as a result of the pandemic, city officials said.

Loan recipients are required to use the funds for “ordinary and necessary business expenses,” not debt consolidation, and must commit to remain open and retain employees, according to the program’s website.

Businesses that received loans during the first round of applications can apply for additional funds as long as the total received over both rounds does not exceed $25,000. Loan recipients that received $25,000 during the first round are not eligible for additional funds at this time, Hilber said.

Hilber said some local businesses have found “unique ways” to operate during the pandemic, including doing more take-out and delivery orders, which may have lowered demand for loans at this point.

However, city officials said they still wanted to offer the second round of loans in case local businesses need them.

“We don’t really know at this point how our businesses have been impacted, but we wanted to reach out to them to make sure that they know we’re willing to work with them so they can, in fact, keep their doors open, especially our downtown businesses,” Hilber said.

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Visit www.columbus.in.gov/columbus-invigorate for more information about the Columbus INvigorate program.

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