After receiving a $1.3 million infusion of federal funding, the Grand Forks Growth Fund will soon begin accepting loan applications for businesses struggling in the wake of the coronavirus pandemic.
The grant, made available from CARES Act funds through the U.S. Economic Development Agency, will be used to set up a new revolving loan fund for businesses in Grand Forks County. The online application portal for the program, called COVID-19 Response Unmet Needs (C-RUN) plan, is expected to open as early as Tuesday, Sept. 15, and an “eligibility self-check” page is already up and running on the city's website.
“We are thankful that the city has received this funding from the EDA, and we hope businesses take advantage of this opportunity,” Mayor Brandon Bochenski said in a Sept. 11 news release. “Hopefully, this federal funding can help local businesses as they work their way through this pandemic.”
City staff are planning on accepting loan applications in waves, with the first wave scheduled to end on Oct. 15. Under the program, loans will be made for $5,000 to $50,000, though in the first wave the maximum amount will be for $25,000, to preserve funding for subsequent waves. Businesses needing more than that amount can apply for an additional loan, should funding remain.
The loan carries a 1% interest rate for a maximum of 120 months, though loans for $25,000 or less have a term of 60 months. Interest and payments will be deferred for six months. Borrowers who provide a personal guarantee in their application could have a reduced interest rate. After review, funds are expected to be disbursed before the end of the year.
Expenses, such as payroll, supplies, utilities and mortgage payments, are accepted uses under the working capital loan. City staff are targeting the loans toward businesses particularly hard hit by the pandemic.
“We are looking at giving some priority consideration to small businesses with 15 or fewer (full-time employees), a gross revenue of less than $1 million, or they are in the accommodation and food services industry,” Collin Hanson, community development planner, told the Herald in a Monday phone call.
Hanson, former executive director of Evolve Grand Forks, was hired by the city to help run the program. Administrative costs associated with establishing C-RUN are included in the EDA's grant for a period of two years.
The funding comes as part of a nearly $7 million program the EDA gave to entities across the state to establish revolving loan funds. The Growth Fund can keep the proceeds from its loans to establish a permanent fund to support economic resiliency in Grand Forks County. The availability of the EDA grant has a shelf life, and all funds must be disbursed to businesses within two years, or the remainder reverts back to the EDA.
The Growth Fund’s C-RUN plan has yet to be given formal approval from the EDA and Grand Forks’ Jobs Development Authority, which oversees the Growth Fund, though that approval appears to merely be a formality at this point.
“We're theoretically waiting on approval on the plan, as far as I know, but the EDA has given us permission to pursue taking applications and start requesting withdrawal of the funds,” said Hanson, adding the program will be finalized before loan disbursal.
C-RUN will be Grand Forks’ second revolving loan fund. The first was established in the aftermath of the 1997 flood, when the EDA gave a $2 million grant to the Growth Fund to provide post-disaster relief to businesses working to retain and create job opportunities in the region.