When local leaders announced that the city would be creating a loan program to help keep small businesses afloat last spring, some taxpayers rightfully met the news with skepticism.
At the very top of the list of concerns was that the low-interest loans wouldn’t ever get paid back.
Over a year later, businesses participating in Columbus INvigorate have largely proved any doubters wrong.
Despite a low interest rate, and not being required to repay the loans back for three years, a handful of businesses have already started returning payment.
The city-backed loan program lent about $874,000 to 48 small businesses within the Columbus city limits between April and September of 2020.
The three-year loans ranged from $5,000 to $25,000, and had a six-month deferral of interest. The interest rate after the six-month deferral is 1%.
Money for the loan program included $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 in a previous interview — significant dollars from important funds.
As of last week, loan recipients had collectively paid back $176,810, or 20% of the total borrowed.
Four businesses — Lockett’s, Yo Mama Frozen Yogurt and More, Dell Brothers and Columbus Rock Gym — have all paid off their loans in full, which combined for $90,000. Lockett’s and Yo Mama are both now closed.
Of the money paid back, Administrative Resources association, which transfers loan payments to the city on a quarterly basis, has so far sent about $116,000 back to the city. None of the 48 businesses have defaulted on their loans.
At this juncture, the loan program should be considered a success. Payments are being made and the program helped many owners navigate a crisis unlike anything most of us have ever seen.
With most pandemic restrictions now lifted, there’s plenty of reason to believe more and/or larger payments are incoming from the businesses that borrowed.
The city should be applauded for the program, which could be used as a model should similar issues arise in the future.