When state officials unveiled a plan to offer bridge loans to Utah small businesses to address the impacts of COVID-19, they predicted “thousands” would apply.
They were right.
In the first round of the loan program, 2,765 companies submitted eligibility applications to the Governor’s Office of Economic Development (GOED), of which 1,031 completed the application process, submitting all required information before the deadline. Loans totaling $6.1 million were awarded to 502 companies.
The application period for a second round of loans took place last week, with eligible but unsuccessful first-round applicants automatically considered for round two loans. Nonprofit organizations also could apply for second-round loans.
Twenty-several percent of first-round awardees are companies in rural Utah.
“Looking back on it, I really think one of the successes of this program is it really went to such a diverse [group], across the state from a geographical standpoint,” Kori Ann Edwards, GOED managing director of operations, told the GOED board at its April meeting.
“It went to so many differ counties and cities all across the state and so many industries — from dentists and healthcare to manufacturing companies, to leisure and hospitality, to our restaurants, to daycares, to our trade industries like our plumbers and electricians. So [we’re] super-pleased with the results.”
GOED established the Utah Leads Together Small Business Bridge Loan program in late March to help Utah companies with 50 or fewer employees that have been hurt by COVID-19. They are designed to serve as a bridge as companies apply and await receipt of loans from the U.S. Small Business Administration or other loan programs.
The bridge loan program offers loans ranging from $5,000 to $25,000 but cannot exceed three months of a company’s demonstrated operating expenses. The loans will be zero interest for up to five years, with the first repayment not due for the first year.
Originally, the program was to use about $8 million, or about $4 million in two phases, using money from the state Industrial Assistance Fund and $500,000 from the Utah Department of Workforce Services. Val Hale, GOED executive director, said that changed, with the money now coming from federal sources and the amount bumped up to $11 million. With $6.1 million awarded in the first round, about $4.9 million remained for the second.
At press time, GOED was still hoping that about $2.3 million in Technology Commercialization and Innovation Program (TCIP) funds also might be used but that would require legislative approval.
Early feedback about the bridge loan program was positive, according to GOED officials and board members. Carine Clark, the board chair, said it had gotten “rave reviews about getting money into the hands of small businesses.”
Hale noted that the quick creation of the program happened during a busy time for GOED, on the heels of the end of the 2020 legislative general session.
“During this time, our team has done something that a lot of people would consider impossible for government: We’ve put together a program that is, really I think, doing some great things for our small businesses in the state,” Hale said. “We’ve done it quickly. We’ve done it efficiently.”
Among those praising the program was Kelvyn Cullimore, president and CEO of BioUtah. “We commend Gov. (Gary) Herbert, Val Hale and the GOED team for getting the program underway and urgently needed funds out the door so quickly,” Cullimore said in BioUtah’s email newsletter.