City receives 4,500 small business loan applications in 24 hours
While the fund currently has $100 million in committed capital, Mayekar says it’s not too late to apply for loans. Some requests will be denied and the city expects more wealthy donors to participate.
“I want to emphasize that there is capacity in the fund,” he said. “We encourage people to apply as soon as they can.”
How worried is the city about not getting its money back due to businesses going bankrupt?
“I would say we really tried to protect against that by having a very good loan loss reserve,” Mayekar said. The loss reserve is $25 million.
“We know this is quite a difficult time for small businesses, but we also have fiduciary obligations associated with this financing and the underwriting standards with other lending partners are written in such a way that we are confident that it there will be no significant losses on the overall portfolio.”
Applications will be considered on a first come, first served basis.
The app is here. The loans have a term of five years, with an interest rate of 1% for the first 18 months, and 5.75 thereafter. They are administered by lending partners including Accion Serving Illinois & Indiana and the Community Reinvestment Fund USA. The checks will be cleared within days, Mayekar says, in an effort to secure business financing until federal loans can be made available.
Cook County officials are also scrambling to bring suburban businesses online for billions of federal dollars as part of the stimulus bill. The County Office of Economic Development is funding a technical assistance program to help businesses and independent contractors access their share of a $377 billion federal program in the bill, including $350 billion through the payroll protection program.
“$377 billion seems like a lot, but it will go quickly,” said Rebecca Shi, executive director of the American Business Immigration Coalition.