WILLMAR — Kandiyohi County businesses hit hard by the coronavirus may be eligible for a one-time, interest-free emergency loan.
During a special meeting Thursday, the joint powers board of the Kandiyohi County and City of Willmar Economic Development Commission unanimously agreed to use $150,000 in undesignated reserve funds to make emergency loans available to local businesses that have been forced to temporarily close — or significantly reduce their operations — because of the executive orders issued by the governor.
The board agreed that restaurants/bars and hair salons — which were ordered to either close or reduce services as part of the state’s safety measures to protect people during the pandemic —would be given priority.
The loans will serve as “bridge” funding until larger state and federal small business loans become available, said Aaron Backman, EDC executive director.
Backman said the EDC has been fielding numerous calls from small businesses that are “on the edge” because they have payments that still need to be made even though there is little or no revenue coming in.
“If there’s any time to help businesses in distress, this is the time,” Backman said.
The terms of the short-term emergency loan includes a 0 percent interest rate, however recipients will be charged a 1 percent loan origination fee. The loans will be for a maximum of 24 months with the potential for payments to be deferred.
Eligible businesses must be referenced in the governor’s executive orders, have a physical location in Kandiyohi County, be registered with the Minnesota Secretary of State, be current on county property taxes and have been in business since Dec. 1, 2019.
With a maximum of $5,000 for each loan, the $150,000 reserve fund could be used to help 30 Kandiyohi County businesses.
The board acknowledged that the funds would help a small fraction of hurting businesses, but said it could help them hang on until larger loans are available from the state and federal government programs.
Kandiyohi County Commissioner Harlan Madsen said providing loans is one way the EDC can respond to the needs of local businesses that are feeling the harsh impact of the coronavirus.
"Like everything involved with COVID-19, it’s a moving target. It’s going to change daily,” he said.
“We’re financially secure, we clearly have the resources and we have an incredible need at this time,” Madsen said.
Willmar City Councilor Kathy Schwantes said it’s important to “act quickly” to help the community’s entrepreneurs. “Why not put the dollars to use?” Schwantes asked, while in the next breath praising the EDC staff for taking action on the loan package.
“It shows great leadership on their part,” she said.
Applications for the loans were being finalized and sent to community banks yet this week. Backman said it’s possible that local banks could “piggy-back” on the EDC loans to provide additional financial assistance to businesses.
Businesses that are interested in the loans can contact the banks or the EDC office or their local lender.
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