Council OKs small business loan program
Up to $250,000 allocated for forgivable loans during COVID-19 pandemic
The Webster City businesses that are experiencing difficulties related to the COVID-19 pandemic now have another avenue to find some relief following action taken by the Webster City City Council Monday night.
In a meeting conducted via Zoom and broadcast on Facebook Live, the council approved up to $250,000 dedicated to helping small businesses hold on during closures and restricted business conditions.
Lindsay Henderson, community vitality director, said she along with Mayor John Hawkins and City Manager Jeff Sheridan had been looking to see if there could be local options for helping businesses impacted by the state and federal mandates.
“We wanted to wait and see where things went with the state and federal dollars,” she said. “And it really didn’t go far enough. So we’re requesting that the council put together a forgivable loan program.”
Henderson asked the council to authorize up to $250,000 from the economic development reserve funds for the loans, with the initial round of $150,000 in loans to be made as soon as possible. She said the loans would be for either $2,500 or $5,000 and would be processed through an online application. She added there would also be a fillable pdf form that could be printed off and returned to City Hall via the city clerk’s drop box.
“The businesses would have to be eligible. They would have to be included in the governor’s proclamation and would have $500,000 or less in gross annual revenues,” Henderson said. Businesses would also have to have 20 or fewer employees.
“The state funds ran out very quickly. There is one business in town that we know that received a grant. I’m not sure how many applied for the funds, but in talking to the Chamber of Commerce, many, many did.” Henderson said. That was a common occurrence across the state, she add.
“We’ve had these funds set aside for sometime and I can’t think of any better economic development purpose than to help retain our small businesses,” she said. “These are businesses that really make our community worth living in.”
Henderson showed the council the template for the grant application. The load will be forgivable, no interest loans. Payments would be deferred for 12 months, but would be forgiven if the business continues to operate in Webster City while abiding by all city codes, remaining current on city utilities and remain in good standing with the city. No credit checks will be done, according to Henderson, but financial information would need to be provided.
Certain businesses would not be eligible to apply, including those related to gambling, adult entertainment, property rentals and multi-level marketing, according to Henderson.
The grant application would be due by noon on Thursday, April 30. Henderson said that once the program was approved by the council, the application could be live on the city website the next day.
Once the applications are received, a task force, comprised of Councilman Logan Welch, Mayor John Hawkins, Henderson and a local banking representative, will review the documents and award the grants soon after.
“It’s OK if they applied for state or federal funding or if any more funding comes up, this will not make them ineligible,” Henderson said.
The funds can be used for mortgage payments, utilities, payroll, working capital, rent or accounts payable.
“We wanted to make this process very clean and simple, and fast because we know people are in a tough spot right now,” she said.
The council unanimously approved the Small Business Hardship Loan Program.
More information will be available on the city’s website, www.webstercity.com.