CEDA Team Member Helps Kasson, MN EDA Create COVID-19 Relief Program to be Layered with SBA, DEED Programs

Article by: Nicholas Ouellette

The Kasson Economic Development Authority (EDA) recently established the Short-Term Business Interruption Loan Program (STBIL) in response to the adverse effects COVID-19 has had on the local economy. Over the last month, the Kasson EDA discussed what they could do to assist businesses that have applied to Federal and State relief programs but were waiting to receive approval or funds. Earlier this year, the EDA had established and funded a new Revolving Loan Fund which serves as a source of gap financing for local businesses looking to startup or expand. The Board recognized the Revolving Loan Funds could be used to provide more immediate assistance to local businesses negatively affected by COVID-19. In order to move forward with the proposed program, the EDA surveyed a number of local businesses; those businesses that had been directly impacted by COVID-19 indicated an interest for loans through this type of program.

CEDA team member and Kasson EDA Staff  Nicholas Ouellette generated a separate set of guidelines under the umbrella of the Revolving Loan Fund Program which outlines the terms and eligibility for the STBIL program. The intent of the program is not to be a primary source of relief funds for businesses, but to be layered with existing support programs such as SBA’s Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). Applicants must demonstrate they have applied for funds through the PPP, EIDL, or similar programs. The STBIL program provides 0% interest loans to businesses based on their fixed costs from February 2020, and funds are to be used for rent, leases, mortgages, utility bills, and employee salaries. Loans will be repaid at $100 a month and payments are deferred six months.

The program has been well received by the community, with multiple applications submitted to the EDA. The Loan Review Committee plans to meet at the end of each week to review and process applications. The EDA hopes this program will provide a positive boost to local businesses while they work through State and Federal relief applications.