PROVIDENCE – The city of Providence is temporarily changing the terms of its business loan fund to help more businesses come up with the capital needed to survive the economic meltdown caused by COVID-19.
Mayor Jorge O. Elorza on Thursday announced a host of changes that will apply to new loans taken out through the Providence Business Loan Fund, including:
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- Decreasing the minimum amount of the loan from $50,000 to $10,000, though the $500,000 maximum remains;
- zero interest for the first 12 months;
- A 6-to-12-month deferral on any payments; and
- Closing costs capped at $500.
The loan fund typically must help support creation of one, new $35,000 job, but in this case retaining employees at their existing pay will also be supported, according to Thomas Hoagland, Providence Business Loan Fund director. Applicants must still also meet the U.S. Department of Housing and Urban Development’s Community Block Grant Guidelines, which discourage funding for “entertainment-only” businesses like athletic venues and nightclubs, Hoagland said. Restaurants and food-service businesses are among those eligible.
Businesses forced to shut down for disobeying city and state restrictions on crowd limits, dine-in services and live entertainment will still be considered, but Elorza emphasized that it was fair to reward those who followed the rules first.
Hoagland estimated it would take two to three weeks maximum from the time a business applies to when they receive the loan.
Additionally, the city is suspending accrual on interest and fees for existing loans for April, Elorza said.
The city is also asking businesses to fill out an online survey to help gather information about how they have been affected by the new coronavirus. The survey, loan applications and a resource guide for businesses are all available at pvdcovid19.com.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
