A Grand Forks committee on Monday greenlit plans for a $1.4 million federal loan program set to help some of the community's smallest businesses weather the coronavirus.
The city's Growth Fund Committee voted unanimously to approve a draft plan for the funds, which the city received under the CARES Act earlier this year and which are specifically aimed at helping businesses manage the economic effects of the pandemic. It now heads to the city's Jobs Development Authority for final approval before being passed along to the federal government.
After government review, the plan comes back to Grand Forks for final approval and the launch of the loan program, city documents say.
The $1.4 million is a comparative drop in the bucket next to federal funds that have already come to Grand Forks under earlier relief programs. In earlier rounds of relief funding under the Paycheck Protection Program, Grand Forks County businesses received between $110 million and $234 million, which loan records show helped retain about 16,500 jobs.
But every dollar counts, City Administrator Todd Feland told the Herald — and this loan program is aimed at particularly small businesses that could benefit greatly from smaller loans.
City documents show the earliest sets of loans out of the fund are aimed at businesses with 15 full-time employees or fewer and hospitality businesses. The loans themselves are set to be small — between $5,000 and $25,000, for the earliest disbursals — with a 1% interest rate. Repayment for those first sets of loans would happen over five years.
City documents note potentially higher loan amounts, with longer repayment periods, for later rounds of lending.
"A rare (program), federal dollars with no strings attached," City Council member Bret Weber, a committee member, said on Monday.
The funding is also crucially important as the pandemic wears on. As students head back to class — both in public schools and at UND — local business leaders have pointed out that Grand Forks is entering a period of uncertainty. COVID-19 case counts have been rising in recent weeks, and it’s not clear what they’ll do next.
The Growth Fund Committee also approved an item making the Start-Up Grand Forks Loan Program permanent. A $100,000 annual set of loans for local entrepreneurs meant to help spur local economic growth, the program has had a three-year history and helped jump-start 10 local businesses, city documents say.
Just like the coronavirus relief loans, the item is expected to appear before the Jobs Development Authority again next month before it’s given final approval.