Further relief is coming to small businesses and nonprofits as the city of Charleston has been awarded $935,000 to make loans to those affected by the pandemic, Mayor John Tecklenburg said at a news conference Wednesday.
The city will lend the money in partnership with the Charleston LDC, which will manage the fund.
The capital will come from the Coronavirus Aid, Relief, and Economic Security Act and be disbursed through the U.S. Department of Commerce’s Economic Development Administration.
“This loan fund will help provide relief to our local, small businesses that are struggling right now due to the ongoing pandemic,” Tecklenburg said
Businesses and nonprofits with a gross income of less than $2.5 million and with no more than 25 employees are eligible. The working capital loans are uncollateralized and will range from $10,000 to $100,000 with a 4% interest rate. Businesses in all of Charleston County can apply, but priority will be given to those within Charleston city limits.
The loans may be used for working capital to hire or retain employees; they may also be used to fund enhancements and improvements for COVID-19 safety compliance or to develop new ways to reach customers who are spending differently because of the coronavirus.
“The loans are intended to be capital to help businesses survive and transition to the new reality of COVID that we’re all living with,” Charleston LDC CEO Steve Saltzman said.
In total, the city was given $850,000 in loan capital and an additional $85,000 for administration of the loan, primarily to buy down the interest rates and offer flexible terms. The city also has money left from a prior Economic Development Administration loan program set up more than 20 years ago. Combined, they equal a little over $1 million.
Saltzman said the city wanted to offer smaller loans because most banks don’t find lending $10,000 to be profitable.
Loans are available until the money runs out, but as they’re repaid, that capital will be returned to the fund to lend to more businesses.
“When we think of these local businesses, we think they’re critical pieces of infrastructure. Once one is gone, it’s very difficult to replace,” Saltzman said.
Of the Black-owned businesses in the area, Saltzman said only 20% received funds from the Paycheck Protection Program. He said this loan is a chance to reach those who didn’t have access to other relief money.
Should business owners need help to navigate the loan process, the Charleston LDC will host free weekly workshops.
“These additional funds will be of enormous assistance to small businesses across the city, including women- and minority-owned businesses that were left out by traditional lending institutions during the height of the pandemic,” said Ruth Jordan, Charleston’s minority- and women-owned business enterprise manager.
Businesses will need to provide documentation of suffering as a result of the pandemic, what the loan will be used for and an understanding of how the loan will be repaid, Saltzman said.
“We’re not out of the woods yet, not only with the virus itself but with business recovery,” Tecklenburg said. “We’ve got a long ways to go.”
Those interested in applying for loans can email firstname.lastname@example.org.