The U.S. Department of Commerce, Economic Development Administration (EDA) has awarded $14.3 million in CARES Act funding across South Carolina to capitalize and administer Revolving Loan Funds (RLFs) that will provide gap financing to small businesses and entrepreneurs adversely affected by the coronavirus pandemic. The City of Columbia received $2.9 million of the funds awarded to the state. The funds will be used by the City to establish the Resilient Columbia CARES Act Revolving Loan Fund.
The Resilient Columbia CARES Act Revolving Loan Fund will be the second EDA funded RLF at the City of Columbia and will be used to finance small businesses located within the corporate limits of the City of Columbia that have been impacted by COVID-19. Under this RLF, business owners may apply for a loan ranging from $10,000 – $200,000. These loans will be zero percent (0%) the first year of repayment and two percent (2.5%) fixed for the remaining loan term.
Funds under the new RLF may be used as outlined in the existing EDA RLF plan, for the purpose of financing building construction, conversions, expansions, acquisition of land, buildings, machinery, equipment, supplies and materials or in particular cases of supplying working capital.
“Each additional funding source helps us to forge ahead and provide vital assistance and services to our small business owners, particularly during such a critical time. Small businesses are the backbone of our community and they help create job opportunities, while also providing critical goods and services,” said City Manager Teresa Wilson. “I am proud of our team in the Office of Business Opportunities as they diligently work to identify resources to help sustain our local businesses.”
In addition to the aforementioned allowable uses, loans provided under the Resilient Columbia CARES Act Revolving Loan Fund may include, but are not limited to, the development of crisis management plans, COVID-19 testing for employees; employee safety training on providing a safe and sanitary work environment to prevent the spread of COVID-19; needed modifications to business operations and facilities to accommodate social distancing; purchasing of personal protective equipment, cleaning supplies and materials or service; inventory; technology to assist with e-commerce and scheduling; and instructional signage.
“Across our Midlands communities, small locally owned businesses form the bedrock of our city’s economic vitality, and these businesses have been among the hardest hit from the pandemic’s spread,” said Mayor Steve Benjamin. “The Economic Development Administration’s $14.3 million CARES Act Recovery Assistance Grants Revolving Loan Funds are a lifeline to these business’ survival, and these funds cannot reach these establishments quickly enough.”
To make credit more quickly and easily available to borrowers impacted by COVID-19 under the Resilient Columbia CARES Act Revolving Loan Fund, the City of Columbia will:
- Waive the application fee ($100.00) and credit check fee ($19.00);
- Waive the loan origination Fee (1% of total amount borrowed);
- Review individual credit worthiness and when necessary, waive the minimum credit score of 600;
- Review minimum collateral requirements when necessary and assess assets on a case by case basis;
- Set loan interest rates at zero percent (0%) for the first year, then 2.5 percent (2.5%) fixed for the remaining term of the loan;
- Current CRLF Loan recipients in good standing are eligible for additional funding under the Resilient Columbia CARES Act Revolving Loan Fund at the discretion of the CRLF Committee;
- Encourage bank participation but not required; and
- Streamline the application process and documentation required for consideration.
“I am pleased that these CARES Act funds will help South Carolina small businesses that have been affected by the current public health crisis. I applaud the City of Columbia for ensuring that these loans are awarded in a manner that is effective, efficient, and equitable,” said Congressman Clyburn. “We must continue to support these businesses by supporting their customers, including essential workers employed by the City and other local government entities. I am hopeful that this support will be provided soon through a bipartisan agreement based on the House-passed HEROES Act.”
“Capital access remains the most important factor limiting the growth and development of small businesses. Given this constraint, the current financial environment due to COVID-19 has placed an even greater burden on local entrepreneurs who are trying to keep their businesses open in today’s turbulent economy,” said Melissa Lindler, Director for Office of Business Opportunities. “The Resilient Columbia CARES Act Revolving Loan Fund will provide a financing option to small businesses in an effort to “prevent, prepare for, and respond” to the economic injury attributed to the coronavirus (COVID-19).”
Prior to disbursing loan funds, the new Resilient Columbia CARES Act Revolving Loan Fund plan must be approved by City Council and EDA. The first reading of the ordinance to establish the fund will be held on Tuesday, September 1st and the second reading is scheduled on Tuesday, September 15th.