Fayetteville’s City Council took a big step toward helping small businesses during its council meeting Monday night, as it approved $260,000 in bridge loans.
The loans are designed to help businesses short term while they wait on additional assitance from federal loan programs or other grants. Qualifying businesses are eligible for up to $5,000 in the program.
The program is being administered by non-profit organization CEED and applications can be accessed at www.ncceed.org. Questions should be directed to 910-323-3377.
From the City of Fayetteville:
City Council approved funding for bridge loans to help keep small businesses operating while they are waiting for approval of federal loans. The program, approved at the council meeting on May 11, is funded for $260,000, and will begin accepting applications on May 12.
The goals of the bridge loans are to provide immediate relief to help small businesses within the City of Fayetteville stay open, limit job losses, provide low-cost “bridge funding” until businesses can qualify for longer term disaster funding from SBA or other funding sources and to reach a diverse mix of area businesses in need of financial support.
“We know businesses are facing some extreme challenges right now and understand the hardships they are facing,” said Kathy Jensen, Mayor Pro Tem and Chairwomen of the Council’s Business Taskforce and a local business owner. “These loans are designed to help businesses quickly and easily, providing a short term financial fix until applicable federal dollars kick in.”
Applications are only being accepted online through CEED’s website at www.ncceed.org beginning on May 12. Additional information on the bridge loans is also available on the website and applicants can call them as well at 910-323-3377. CEED, acting as a clearing house for the city, will work with small businesses in the community which need help during this time. The City has a long-standing partnership with CEED, dating back to 2005. CEED will process the applications, underwrite and fund the loans using standardized guidelines in a consistent and expeditious fashion to get the money to qualified businesses as quickly as possible.
Each qualified business is eligible to receive up to $5,000, with a total of $250,000 being disbursed by the city for up to 50 businesses. The remaining $10,000 of the $260,000 will be provided to CEED to administer the program for 3 years, as the city is not properly staffed or qualified to administer a program of this magnitude. The loans will be issued at current interest rates of Prime (currently 3.25%) plus 1%. An estimated initial payment of $17.71 in interest only will be required for the first six months, and approximate payments of $149.95 monthly for the life of the loan if permanent financing is unavailable.
Information required as part of the application process will include the number of full and part time employees, a copy of the client’s credit report from freecreditreport.com and the latest tax return / business tax information.
Once a business submits all the required information and CEED reviews the packet for completeness, the packet will be reviewed by a committee of local small businesses and city staff to determine loan approval or denial. It is expected that once the loan is approved, it will take up to 3 days to disburse funds.
The City of Fayetteville also offers grant programs for businesses funded through Community Development Block Grants (CDBG), which is a Housing and Urban Development (HUD) program. Businesses are encouraged to contact the Economic & Community Development department for details at 910-433-1590 or CommEconDev@ci.fay.nc.us.