SBA Approves Colorado For Disaster Loans As State Economic Development Leaders Tackle Coronavirus
DENVER – Colorado small businesses can now apply for an emergency loan program activated to combat the economic impacts of the coronavirus outbreak.
Governor Jared Polis announced approval of Colorado’s application to participate in the Small Business Administration’s Economic Disaster Loan Program, which gives business owners the option of applying for low-interest loans up to $ 2 million. The announcement came on Thursday afternoon, just hours after Colorado economic development leaders gathered to discuss additional tools the state could implement to help affected businesses.
“The economic impact of COVID-19 has been felt across our state. We are committed to protecting public health and safety and will continue to fight to reduce the pain small businesses in Colorado feel, ”Polis said in a statement. “This essential designation allows small businesses in Colorado’s 64 counties to apply for federal payback loans that can help them get through this difficult time.”
While these loans can be a crucial lifeline for some, they’re not an option for all business owners, said Glenn Plagens, director of new business support and rural prosperity for the Colorado Office of Economic Development and International Trade, at a Colorado Economic Development meeting. Commission. Since the program requires businesses to submit one-year financial data, the Disaster Loan Program may be out of reach for new businesses.
This is where state organizations such as OEDIT can intervene.
“We want to make sure that whatever we do fills in the gaps in some of the other state and federal programs already in place,” said OEDIT Executive Director Betsy Markey.
The office’s Strategic Fund, which has an unspent balance of $ 5.1 million and a reserve of $ 9.5 million, could help fill some of these gaps.
Reserves can be tapped “for exceptional opportunities or contingencies in times of crisis,” said ODEDIT Deputy Director and Director of Global Affairs Jeff Kraft.
“These are extraordinary and very worrying times,” he said, adding that the use of the Strategic Fund was prudent.
While economic development officials are still crafting specific policies on how the funds might be used, grants to nonprofit lenders such as Colorado Lending Source and Colorado Enterprise Fund will likely be an important part of the final plan.
“These grants could be used by nonprofit lenders to pay the interest of companies with existing or new loans that are in economic difficulty,” Kraft said. “Maybe you are a closed little restaurant. We would ask the lenders to forgo your principal payments for a few months and we would pay the interest. This would keep nonprofit lenders whole and creditworthy and ease the cash flow of businesses. “
Ultimately, the objective would be to help companies in difficulty to “keep some of their employees and not have so many layoffs”.
The concept of serving as a safety net for existing businesses is a backbone for OEDIT, which typically focuses on recruiting new businesses to relocate to Colorado or to help current businesses grow.
“All of our incentives are primarily tied to job growth,” said Wendell Pryor, member of the Colorado Economic Development Commission. “I think we need to combine this with a mindset of a job retention strategy.”
Rather than focusing heavily on recruiting new businesses in the state, he said the state’s economic development leaders need to broaden the conversation to “what it will take to keep a business going.”
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