A city-funded loan program for small businesses in Columbus impacted by the COVID-19 crisis has gotten off to a quick start, with 15 local small businesses applying for loans on the first day.
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. The loans do not require collateral but require a personal guarantee from applicants, city officials said. Interest rate after the six-month deferral would be 1%.
The deadline for the first round of applications is 4:30 p.m. April 30, city officials said. All applications received before the deadline will be considered filed at the same time.
"I was thinking that we’d see somewhere around 10 to 15, so this is probably a little bit on the higher side of what we expected," said Eric Frey, executive director of Administrative Resources association, a nonprofit governmental association that is administering the program.
Earlier this week, the Columbus City Council approved the creation of the program and the use of $1 million in city funds for the program.
To be eligible to apply, companies must have been in business as of Jan. 1, have fewer than 50 employees, no more than $2 million in gross receipts and show a decline in revenue this year due to the pandemic. The Columbus City Council has approved creating a loan program to help small businesses within the city limits through the COVID-19 pandemic crisis.
Priority will be given to small businesses that have higher credit scores, demonstrated financial need, retention of employees, financial capacity to return to or continue operations, among other criteria.
The city money for the loan program will come from $250,000 from the Economic Development Income Tax Fund, $350,000 from the city’s general fund capital improvement fund and $400,000 in city redevelopment funding, city officials said. The $350,000 in capital improvement funding will come from deferring that amount from planned projects in 2020 to next year.
"We talked a little bit with the (Columbus Area Chamber of Commerce) and got their input and their sense that there was a pretty substantial demand, especially as the SBA funding ran out," Frey said. "But as far as to quantify (the demand), we really didn’t know the depth of it, but I know that the mayor and Community Development have had a lot of community input and commentary on the need and downtown businesses and so on have expressed their concern."
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Visit www.columbus.in.gov/columbus-invigorate/ for more information about how to apply for a loan under the Columbus INvigorate program.
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