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.
