City officials promise quick action on small-business loans

The $100 million loan fund will start taking applications March 31 from businesses affected by the coronavirus.

SHARE City officials promise quick action on small-business loans
At 8 a.m. Thursday at the bus stop at State and Madison, a man waits by himself in the city’s Loop as the pandemic closes businesses and causes many to work from home.

Small businesses in Chicago affected by the coronavirus pandemic could receive loans from the Chicago Small Business Resiliency Fund beginning in April.

Ashlee Rezin Garcia/Sun-Times

Over 300 owners of small businesses have expressed interest in a $100 million loan fund, and city officials said Friday they will begin distributing money in early April.

The Chicago Small Business Resiliency Fund will issue low-interest loans of up to $50,000 to employers affected by the COVID-19 pandemic. The loans are designed to help businesses with cash flow for rent and payroll and are part of Mayor Lori Lightfoot’s general program for economic relief, which includes extending until April 30 the due date for business-related tax payments.

The fund will start accepting applications March 31 and begin approvals within a few days, officials said. “We’re going to get the money out the door in short order,” said Samir Mayekar, deputy mayor for economic development.

Officials cited a study by JPMorgan Chase showing the average small business in Chicago has only 28 days of cash on hand. Government-ordered shutdowns in Illinois and Chicago, culminating in a shelter-in-place order Friday, have caused an instant stop in revenue for many businesses.

City officials said in a poor community such as Englewood, small businesses often have enough money to carry them just a few days.

Eligible loan recipients must have fewer than 50 employees. Jennie Huang Bennett, chief financial officer for the city, said loan terms are being finalized. Interest rates, she said, “will be lower than market terms are.”

The fund represents a reappropriation of $50 million allocated to the Chicago Community Catalyst Fund, which was started by former city Treasurer Kurt Summers Jr. but has been inactive. Chaired by current Treasurer Melissa Conyears-Ervin, the fund will be administered by registered Community Development Financial Institutions that will provide application screening, credit underwriting, loan disbursements and servicing.

Recipients must show at least a 25% revenue decline attributable to the pandemic. While strict standards will apply, officials promised the application process will be streamlined.

Other funding sources for the effort include $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 private funding sources.

Mayekar said the amount available for loans should increase as other donors have said they want to help.

Those interested in receiving information and a loan application are asked to fill out a form at https://www.surveymonkey.com/r/COVID19Chicago.

Business-related taxes being deferred until April 30 include those collected for bottled water, checkout bags, amusements, hotel accommodations, restaurants and parking.

The Latest
Lucas Giolito pitched six innings of two-run ball Monday night against the Angels.
When federal policies fail us, state and other local elected leaders can guide us on a different path. Vote.
Mayor Lori Lightfoot made the remark — which lit up the Twitter-verse — during a weekend appearance at Pride Fest in Grant Park. Six mayoral challengers said they were outraged by the comment.
Midtown Center’s summer program for Chicago youth opens in new Wicker Park location.