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City OKs first $4.7 million in loans for small businesses

The $100 million fund helps entrepreneurs harmed by the COVID-19 economic shutdown.

Rosa Escareno, commissioner, Department of Business Affairs and Consumer Protection
Rosa Escareno, commissioner, Department of Business Affairs and Consumer Protection
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City officials said Friday they have approved $4.7 million in loans, the first disbursements under the $100 million Chicago Small Business Resiliency Fund.

With the average recipient getting $38,000, businesses that have lost income due to the coronavirus can use the low-interest loans for rent and payroll. Commissioner Rosa Escareno of the city’s Department of Business Affairs and Consumer Protection said staff continue to process applications at the rate of one every 10 minutes, keeping up that pace during weekends.

“We know that businesses need this money right away,” she said. More than 2,000 applications have been processed and 300 are in the underwriting process. Applications are being taken through April 24.

Escareno said the program targets businesses that run on cash or are nonprofits and without established banking relationships. In contrast, the federally run Paycheck Protection Program that’s now tapped out is administered largely by banks.

“It’s a great option for our business community, but we are supposed to be supplementing the federal dollars,” Escareno said.

To help businesses qualify for the loans, the city has deputized 10 neighborhood chambers of commerce or business development agencies to work with applicants. Called Small Business Navigators, they are paid $10,000 apiece for the work, Escareno said.

Recipients must employ fewer than 50 people and document a revenue decline of at least 25% from the COVID-19 outbreak. The maximum loan is $50,000.

Applications are available at connect2capital.com/partners/chicago-small-business-resiliency-fund/.

Mayor Lori Lightfoot announced the fund March 19 as part of the city’s effort to help individuals and businesses.

The money comes from a pledge of up to $50 million from the city treasurer’s Catalyst Fund, $25 million from the city of Chicago, $10 million from Goldman Sachs’ Urban Investment Group, $1 million from Fifth Third, $250,000 from Clayco, and $15 million from additional sources.