COVID-19, News

Lawmakers crafting $75 million small business loan program

A bill pending in the NC House would create a $75 million short-term loan program for small businesses trying to weather the COVID-19 pandemic.

The program, discussed in a House select committee work group Tuesday, would build on an earlier $15 million program from administered by the Golden LEAF foundation that quickly found demand far greater than its funding.

The bill, as currently drafted, would differ in some important ways, lawmakers noted Tuesday:

* The bridge loans would be capped at $50,000, with money coming from and being repaid to the state’s general fund, minus up to 5 percent for administrative costs.

* There would be no payments on the loans for six months.

* The length of the loan term would range from 54 to 66 months.

* It eliminates a requirement that businesses have fewer than 50 employees, instead prioritizing those with 100 of fewer full-time equivalents.

* Those who received duplicate funding from a federal program would have to pay it back to the state.

* The appropriation for the program would go from $25 million to $75 million.

House Speaker Tim Moore (R-Cleveland) praised the draft will in the video meeting at which its details were explained Tuesday.

“When we were talking about this the other week we were starting with $25 million,” Moore said. “I’m just glad we were able to identify an additional $50 million to do on this. So this is going to be money well spent. You look at the $15 million that was already spent…we found another $50 million here and I think this is going to be a project we can all be very proud of.”

The federal Paycheck Protection Program funding has been exhausted, Moore said, and state lawmakers hope the U.S. House will approve another $250 million for that program.

“Everyone  on this call or in this legislature knows someone who has a business, or works for a business, where they’re dealing with these issues and this kind of loan is the difference between the business staying open or closing, between people having a job or not.”

Leaders of the House and Senate and Gov. Roy Cooper released a joint statement Tuesday afternoon in support of the program.

“The program has proven to be efficient and effective,” they wrote in the statement. “It helps employers access capital quickly while they apply for federal Small Business Administration assistance or other commercial loans. Businesses are eligible for low-interest loans up to $50,000, with no payments for six months. We know that this program is already oversubscribed and want to assure small businesses that more help is on the way.”

“We will work together to provide a substantial allocation to Golden LEAF that will be worked out in more detail between now and the beginning of the General Assembly session,” they wrote in the statement.



One Comment

  1. Justin

    April 28, 2020 at 9:47 am

    What, if anything, ever came of this? Has funding been approved? If so, where can I find application details? Thank you.

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