Business owners who have been negatively affected by the coronavirus may be eligible for a small business loan.
That’s the message from Lara Owings, Loans Officer at Southeast Arkansas Economic Development District.
The district hired Owings in October to oversee the loan program, which has its roots in a $ 2.1 million grant the district received from the Federal Economic Development Administration.
The program is designed to help small businesses with no more than 150 employees located in any of the 10 counties in the district: Arkansas, Ashley, Bradley, Chicot, Cleveland, Desha, Drew, Grant, Jefferson and Lincoln.
“It’s not for the cities or the counties themselves,” Owings said. “It’s up to these small family businesses to help them keep their doors open and hang on to their employees.”
Owings, who came to the district with nearly two decades of banking and real estate experience, said she wanted to let businesses know that low-interest money is available to help keep open a business or reopen a business that the covid-19 pandemic has had an impact.
“It’s a great program that not many people know about,” Owings said.
Spreading the word seemed more doable just a few months ago. It was then that Owings would organize small face-to-face meetings with small business owners. But then a person in one of the groups she was going to meet tested positive for the coronavirus.
“I said, no we can’t do that anymore,” Owings said, “But we still have the money and still have the same deadline, but [business owners] it is still necessary to know it. “
The interest rate on loans is 4% – “You can’t borrow money from a bank for 4%,” Owings said – with a minimum loan of $ 3,000 and a maximum of $ 50,000 . Repayment begins six months after receiving the loan, but with approval that start date can be pushed back up to six months, Owings said.
To be eligible, a business had to be created before January 1, 2019, so the money is not intended to start a new business. But if the pandemic has caused a business to shut down, those businesses may be eligible if the loan money will help the owner reopen, she said.
The purpose of the loans is to help keep a business open and people working, she said, so the loan money cannot be spent on personal bills or items the owner owns. of the company. And because the district has known from the start that the business has been going through rough times, Owings said, the district will ignore the problems the business has had in paying its bills.
“We don’t look at credit checks,” she said. “That’s the whole problem. We know they haven’t been able to make their payments, so we want to make sure they know that this money is for things like that.”
Currently, the district has made four loans totaling $ 110,000, Owings said, with an average loan amount of around $ 25,000.
“They were all open,” she said of the businesses. “One of them was wavering, but we were able to help [keep] him to close his doors and have to lay off his employees. He was able to bring his business back, which was ideal. We want people to keep their jobs. “
Owings said those interested can head to the district’s website at SoutheastArkansas.org and apply online.
The goal is to lend half of the money supply by July 1, 2021 and lend the other half by June 30, 2022, said Patrecia Hargrove, district executive director.
If the district is not able to attract enough clients for the loans, those who run the federal program that allocates the money “will look into that area and say, ‘you don’t need it and maybe you don’t need it. ‘another area needs it more’. mentionned. “And I know Southeast Arkansas, and I know there are a lot of businesses that need these funds.”