Although the necessity is predicted to far exceed the capability, the town of Spokane introduced a brand new mortgage program Thursday for small companies that fall into the “gaps” in federal and state help.
This system will present loans from $10,000 to $25,000 to Spokane companies which are in any other case worthwhile however struggling to make ends meet throughout the COVID-19 pandemic.
“There’s an enormous want,” Mayor Nadine Woodward mentioned.
The loans will carry a 5% rate of interest and a 2% charge for companies, which with a view to qualify should have an lively enterprise license in Spokane, have had a worthwhile yr in 2019 and have a credit score rating of at the very least 640.
The $500,000 in funding out there to companies comes from the nonprofit Craft3, which focuses on offering loans to small companies – together with a number of on North Monroe Avenue throughout the highway’s reconstruction in 2018 – and can administer the brand new program. Officers anticipate the $500,000 won’t final lengthy.
Town invested $100,000 of its federal Neighborhood Growth Block Grant cash to decrease the rate of interest to five%.
The quantity every enterprise qualifies for will rely upon its want and its projected potential to repay the mortgage.
The loans can be focused at companies with 50 or fewer staff, in response to Tim Sigler, director of the town’s Neighborhood, Housing and Human Companies division. There aren’t any particular restrictions on how the funding might be spent, he mentioned.
The minimal credit score rating of 640 is meant to go away this system open to companies which will in any other case have challenges acquiring a mortgage.
“With bigger (lending) establishments, the credit score rating must be a lot increased than that,” Sigler mentioned.
Town expects the applying interval to be brief, launching subsequent week and doubtlessly lasting every week or much less. Candidates are requested to name the town’s new monetary helpline at (509) 625-6650 for an preliminary screening. If it qualifies, a enterprise can be directed to Craft3 to fill out an software.
Woodward mentioned small companies are having issue accessing assets, such because the Small Enterprise Administration’s Paycheck Safety Program. On Thursday, that program ran out of funding, in response to media experiences.
“There’s a hole that a few of our small companies are falling into,” Woodward mentioned.
The Neighborhood, Housing and Human Companies board authorised using block grant funds to help this system. Pending approval from the Spokane Metropolis Council on Monday, it’ll start taking purposes subsequent week.