While the federal Payroll Protection Program grabs national headlines for its rapid depletion, a pandemic relief loan effort for local businesses announced earlier this month by the Richmond Economic Development Authority still has funds up for grabs.
About $410,000 of the EDA’s $1 million Richmond Small Business Disaster Loan Program (COVID-19) has been awarded to 21 businesses in the city as of Tuesday. That’s out of 63 applications received, about a third of which have been approved for funding thus far.
The EDA program is intended to help small businesses cover payroll while state-mandated, coronavirus-related social distancing has severely cut into local companies’ revenue. It was approved April 2, amid other local governments’ efforts to mitigate the virus’ effects.
Of the roughly $410,000 approved, about $16,000 had been disbursed as of Tuesday, and that amount was split between five businesses: Roastology coffee shop on Cary Street, wedding coordinator Love Birds Events, outdoors recreation company Riverside Outfitters, ice cream shop Charm School RVA and dry cleaner Bellevue Cleaners.
The Richmond program permits maximum loans of up to $20,000 or six months of employees’ wages, whichever is less, to help for-profit businesses cover wages. Payment of the one-time, zero-interest loans is deferred for six months.
Leonard Sledge, city economic development director, said in an email Tuesday that his office has been mindful while parsing through the dozens of applications.
“I want us to move quickly because our businesses need the funding to help them stay open. At the same time we must exercise good stewardship over the taxpayers’ dollars and give each application the careful review it requires,” Sledge said.
The city economic development department has one employee assigned to the program, and the department still is working through the rest of the applications. No applications had been rejected to date, according to a document provided by Sledge.
Program funding came out of the EDA’s unrestricted fund. City staff process applications on a first-come, first-served basis. Sledge said the program won’t be an end-all solution to city businesses’ financial troubles brought on by the virus, and the program is intended to help in tandem with federal aid.
“We started this loan program knowing that we would not be able to meet 100 percent of the financial needs of our small businesses. We do hope that this program serves as a bridge to the much-needed CARES Act federal funding for our small businesses,” he said.
In a separate nod to the difficulties experienced by local businesses, City Council on Monday approved an amnesty program for delinquent admissions, meals and lodgings taxes.
In Henrico, the county’s EDA also has made moves toward small-business support, including a $2 million deposit it made last week to Virginia Community Capital. The deposit provides liquidity to help VCC loan money to Virginia businesses via the Paycheck Protection Program. The VCC had secured PPP loans for 19 companies in Henrico totaling more than $2.9 million as of April 22, and 151 loans worth $19.2 million across the state.
The last few weeks have been characterized by increasing local government efforts to support local businesses and keep construction projects on schedule. In Henrico County, supervisors voted to relax the approval process for development plans and subdivision plats. Chesterfield County launched an online development plans submission system.