Manchester Board of Mayor and Aldermen Approve Small Business Recovery Loan Fund
In early April the Board of Mayor and Aldermen voted to launch the Manchester Small Business Recovery Loan Fund to provide resources to small businesses so they can proactively develop a tool and resource targeted to help small businesses across the city reopen and resume normal operations.
To capitalize on this fund, The Manchester Development Corporation (MDC) will transfer $500,000 to the City of Manchester. The City will match the MDC contribution of $500,000 with a $500,000 transfer from its special economic development revenue account. This will allow Manchester Small Business Recovery Loan Fund to launch with $1 million in loan resources available to small businesses and in strong position to seek additional contributions from State and Federal partners and possible corporate partners and foundations.
Mayor Joyce Craig
“A month ago, Manchester’s economic outlook was strong. Today, we’re faced with implications of COVID-19 that are beyond our control, and most of our local small businesses have temporarily closed or have experienced significant decreases in business.
But, our current situation won’t last forever. Manchester is a resilient community and once this pandemic is over, we will work together to move our city forward. Our small businesses contribute a great deal to our local economy and we must do what we can to help them reopen after this unpredictable hardship. Thanks to a partnership between the City of Manchester, the Manchester Development Corporation and the Greater Manchester Chamber, we’re doing just that by establishing The Manchester Small Business Recovery Loan Fund.
Our small businesses need our help and support during this unprecedented time and this low-interest loan fund will incentivize small businesses in Manchester to reopen and resume normal operations.”
Richard Tango-Lowy – Master Chocolatier & Owner, Dancing Lion Chocolate
“Over our past nine years, Dancing Lion Chocolate has watched Manchester transform into a vibrant downtown with many successful small businesses. These businesses are now at risk; this program can help preserve them, and the progress that’s allowed our City to thrive.”
Mike Skelton – President & CEO, Greater Manchester Chamber
“While we are taking the necessary and important steps to stop the spread of this virus and ensure our community is healthy, we have to start acting now so we are prepared to help our small business community recover when the closure order is lifted. Our small business community was thriving before the onset of this crisis and we can’t allow the progress our city and downtown has made over the past decade be lost.
The idea of this program was born out of discussions of how we help our small businesses during this unprecedented situation. Resources like federal emergency loans hopefully will help businesses stay afloat during this closure, but we recognized there will likely be a need for an injection of capital when the time comes to reopen and resume normal operations. This program is intended to fill that gap and provide small businesses with quick, easy to access capital to rehire employees, restock supplies, and resume normal operations while they rebuild their revenue streams.
Without a tool like this, I’m concerned the costs of resuming normal operations could keep some small businesses from reopening who were otherwise healthy and successful prior to this crisis.”
Kyle York – CEO, York IE, Co-Owner, Shoppers Pub + Eatery, and Downtown Commercial Property Owner
“Manchester has made great strides over the last decade on the backs of entrepreneurs and small businesses committed to our city. A recovery loan program like this is imperative to help get our small business community back on its feet and stronger than ever.”
Alex Horton – Owner, Café La Reine
“The COVID-19 pandemic has impacted each and every one of our small businesses in Manchester. For some businesses, this could mean permanent closure. As a community, we need to do everything we can to offer assistance to restaurants, bars, retail shops, salons, and other local businesses after this crisis is over. I one hundred percent support the City of Manchester, MDC, and the Chamber’s efforts in ensuring that our downtown continues to thrive once we are allowed to open again. Innovative ideas like the Manchester Small Business Recovery Loan Fund are critical to our city’s future.”
The structure of the Manchester Small Business Recovery Loan Fund is as follows:
- $1,000,000 in initial funding from the City of Manchester (allocated from special revenue account) and MDC additional funding to be sought from other partners.
- Maximum loan amount of $25,000 and the interest rate at 2.0 percent. At this maximum loan amount and $1,000,000 in initial funding, 40 small businesses can participate.
- Eligibility restricted to any Manchester small business that experienced a loss of revenue or closure due to the COVID-19 emergency. MDC will create specific definitions and guidance on eligible small businesses.
- Eligible Uses: Use of loan funds must be restricted to costs associated with resuming operations: working capital, payroll, workforce recruitment, and inventory. No capital improvements permitted.
- Start Date: No sooner than June 1, 2020, assuming the public health situation is improving, and closure of business order is lifted. applications can be submitted in advance of this date to ensure funds are ready for disbursement.
- The application process will be based on the existing Queen City Loan Fund process
- Loan Terms: 60 months for loans from $15,000-$25,000, 36 months for loans under $15,000. $25,000 for 5 years at 2.0 percent is a monthly payment of $438.19). No interest or payments are due for 3 months.
- Capital Regional Development Corporation (CRDC) will serve as the loan underwriter on behalf of MDC. CRDC will reduce their normal fee to process each loan to $400 from the current level of $750.
- MDC will review and approve all loan applications based on CRDC guidance and completion of the loan application and supporting documents.
- Using Queen City Loan Fund process and documentation and a guide, MDC will develop an application, guidelines, and eligibility terms for the Manchester Small Business Recovery Loan Fund.
- MDC will provide monthly reports to the BMA on the use and performance of this loan fund.
- Greater Manchester Chamber will serve as a partner to coordinate marketing, outreach, and promote awareness of the program to eligible small businesses.