CEDA Helps Preston, MN Launch New Assistance Program in Collaboration with Community Businesses and Organizations

Article by: Cathy Enerson

In response to the shut down and slow down of local businesses, on April 6, 2020, the Preston Economic Development Authority (EDA) announced their COVID-19 Emergency Economic Development Loan Program.  According to CEDA team member Cathy Enerson, serving as the Preston EDA Director, “the loans will be used to provide assistance directly to small local businesses during the COVID-19 pandemic event. The up to $3,000 loan is intended to be interim financial aid to help keep businesses operating and a part of the tax base once the pandemic is over”.  The loan terms provide for 0% interest and repayment over five years. Loan payments are paid by the lender directly to the tax assessor or utility providers.  These payments sunset December of 2020. Applicant loan repayments begin January 2021.   In an effort to enhance the program and to help businesses located within the City of Preston, the Preston Area Community Foundation (PACF) and F & M Community Bank (F & M) together added $10,000 to the $30,000 loan program fund for a total loan fund of $40,000.  Those dollars are to be used by the EDA to forgive 25% of the loan which a business takes out through the loan program.  For example, if a business borrows the maximum $3,000, they will only need to pay back $2,250 of that.

Funding for the loan program was supported by a grant to the Preston Area Community Foundation in the amount of $5,000 from the Southern Minnesota Initiative Foundation (SMIF).  Mary Schwarz, the current chair of the PACF board, said, “We saw the need in the community as well as the opportunity to support the community by partnering with SMIF to provide some funds for the EDA loan program.  It’s times like this when a local foundation like PACF can make a meaningful impact.”

When Dan Christianson, CEO of F & M learned about the loan program and the grant through PACF’s, he decided F&M could help as well.  “Supporting the Preston business community and PACF is something we’ve made a priority for many years”, stated Christianson.  “So we decided we would contribute $3,300 to the EDA fund to help with the forgiveness portion of the loan program.  In addition, we will make a donation to PACF in the amount of $1,700 to cover their portion of the program.  This will allow the PACF to maintain their fund balances for future opportunities like this.”

The EDA has received seven applications for the Local Emergency Loan.  Additional loan funds are still available on a first come, first served basis.