HUDSON — A city department leader said there is "very limited interest" among small businesses in a loan program that council has considered implementing to help companies during the COVID-19 pandemic.
Hudson Economic Development Director Jim Stifler told council on Tuesday that the city had the chamber of commerce and other similar organizations speak with businesses about the city’s potential loan program.
Stfiler said businesses, for the most part, are not interested in the possible loan program because they do not want to take on more debt and because a company must be denied a loan from a bank before they can apply to the city’s program. He observed the best candidates for the program would be businesses who had already a sought a loan and been turned down. Stifler added there was "very little interest [among businesses] in going to a lending institution to see if [they] would be denied."
By law, the city must use the Community Improvement Corporation (CIC) to administer its loan program. Council recently discussed the need to appoint more people to the CIC to ensure that it was a fully functioning organization. Stifler on Tuesday suggested council continue working to set up the CIC so it was ready to go if legislators later decide to implement the loan program.
City Manager Jane Howington added she felt it was "really important to get the CIC up and running and organized. We know that we’re going to need them in some form or another over the next six to nine months."
Howington suggested council could approve the legislation to authorize the loan program, but not allocate money for it yet "so it would be there if and when we need it."
Council gave a first reading to the loan program legislation on Tuesday. It will go before council for a second reading on June 2.
Council has discussed the possibility of earmarking $300,000 for the loan program. The program would offer two types of loans. Part A of the loan program will provide for perishable restocking with a maximum loan of $10,000 provided to a business. Overall, $200,000 is proposed to be allocated for the Part A program. Part B of the loan program will be for shuttered small business assistance in re-opening requirements with a maximum loan of $3,000 provided to a business. An overall amount of $100,000 is proposed to be set aside for the Part B program.
Stifler added that the businesses would prefer to receive a grant to help them.
"I would encourage everyone to reconsider what it would take for cities to make a grant down the road," added Stifler. "I think if we get to the point where businesses are in dire need further down the road, as a city we’re not going to be able to give them enough money ourselves to save the day. We may be able to throw in with renewed federal stimulus [money], more county stimulus, local foundation stimulus …so that we can contribute to other programs where you might be able to make a difference."
Council member Skylar Sutton (Ward 3) said he felt the city should "tread carefully" when considering the possibility of offering grants because the money would come from the general fund.
More grant money coming through COVID-19 relief program
There were six city businesses that received a grant from the COVID-19 Small Business Emergency Relief Grant Program being offered by Summit County and the Greater Akron Chamber of Commerce.
The county recently decided to award another $5 million to eligible businesses and is financing the second round of funding with a portion of its federal Coronavirus Aid, Relief and Economic Security Act (CARES Act) allocation.
"We determined that there are 50 businesses in Hudson in round two [of the grant program] that, should they be current on obligations to the city and the county, would be receiving a grant this time around," said Stifler. "…The county program, I think, has been helpful."
Reporter Phil Keren can be reached at 330-541-9421, email@example.com, or on Twitter at @keren_phil.