HUDSON —The city may soon offer loans to small businesses to help companies in the municipality weather the effects of the COVID-19 pandemic.
City Council on May 5 discussed creating a Small Business Recovery Loan program to support merchants as they begin to reopen. The discussion will continue at council’s workshop on May 12 and it is anticipated that legislators will vote on implementing the program on May 19, said city spokesperson Jody Roberts.
The initiative would earmark $300,000 for a program offering loans to "a limited number of qualifying businesses that have been economically disadvantaged by the COVID-19 pandemic," said Roberts.
The funds would be used for economic development, to maintain employment opportunities for residents and preserve operations of the city’s small businesses.
The program would offer two types of loans and eligible businesses could apply for one of the two types, Roberts said. The Part A Reopening Loan would provide money for essential reopening costs, and the maximum loan would be $10,000 per business. The maximum overall amount allocated by the city for the Part A loans would be $200,000.
The Part B Micro-Loan would provide shuttered small business assistance with reopening requirements, and the maximum loan would be $3,000 per business. The maximum overall amount set aside for Part B loans would be $100,000.
Roberts said additional details such as where the money will come from and the criteria that businesses must meet to be eligible will be forthcoming as the program administration, application procedures and deadlines are established.
City Manager Jane Howington told council May 5 that the administration drew up the proposal based on input it had received from council members.
She added the proposal offers a way of "helping people to reopen a business both from a stocking, supply-and-demand kind of issue — which may be more appropriate for the restaurants — and then you have some of your smaller businesses that just have had no cash flow for six weeks."
To administer the loan program, by law, the city would use the Community Improvement Corporation (CIC), said Howington. The use of the CIC is expected to be discussed at greater length during the May 12 council workshop.
Council member Hal DeSaussure (At Large) said he felt the Part A loans would be appropriate for restaurants, while the Part B loans would be used by non-restaurants.
"It helps the businesses, but it helps Hudson, too, because … we’re better off if we have successful and thriving businesses," said DeSaussure.
Council President Bill Wooldredge (At Large) said if council wants to move forward with the program, he believed it should happen "fairly soon."
"In a situation like this, cash is king," said Wooldredge. "That’s what most of them are lacking is cash, cash to get themselves going again."
Council member Chris Foster (Ward 2) said it was "important" and "urgent" to move forward on the proposal, but added he felt the city would be OK if the program was put into action on May 19 at council’s next regular meeting.
Reporter Phil Keren can be reached at 330-541-9421, email@example.com, or on Twitter at @keren_phil.