Utah state government has implemented a new loan program designed to help businesses hurt by the impacts of the COVID-19 virus.
At a special meeting conducted by phone last week, the Governor’s Office of Economic Development (GOED) board unanimously approved the establishment of the Utah Leads Together Small Business Bridge Loan program, which will have about $8 million available in its first phase to lend to Utah companies with 50 or fewer employees.
The loans will range from $5,000 to $25,000 and cannot exceed three months of demonstrated operating expenses.
Online applications for the first round of loans — about $4 million — were accepted last week and awards are expected to be approved by the GOED board this week. A second round of applications are expected to be accepted this week. A third round is possible and might include nonprofits.
GOED officials are expecting “thousands” of applicants.
“Our goal is to have money in the hands of these businesses by the end of [this] week,” Val Hale, GOED’s executive director, told the board. “And the purpose of this is really just to bridge them to where they get SBA loans and other things. Those will be coming in the near future.
“We want to get this money into their hands as soon as we can so they can use this and then hopefully also apply for SBA loans and other loans that would be coming down the road. … We hope to help as many small businesses as we can.”
The loans will be zero interest for up to five years, with the first repayment not due for the first year. At least one-fourth of the loans will go to businesses in rural Utah.
Applicant companies must be viable and have been established and licensed by Jan. 1. Applying is not a guarantee of funding. Preference for funding will be given based on specific criteria available online but will include companies with an effect on supply chains, those that have a multiplier effect on other industries and those with high-paying jobs.
Eligible loan uses include working capital to support payroll expenses, rent, mortgage payments, utility expenses or other similar expenses that occur in the ordinary course of operations. Applicants must provide six months pro forma of estimated lost revenue or other documented loss evidence.
Receiving other forms of emergency funding will not disqualify an applicant from receiving loan funds through the program, but companies must disclose if they have applied for emergency funding from other sources.
“We just need to know,” Hale said. “A lot of business probably aren’t even aware of what’s happening or how to apply for the federal” SBA program.
A committee chaired by Hale will review applications weekly, with subsequent review and approval by the GOED board.
GOED is repurposing Industrial Assistance Fund money for the bridge loan program and Utah Department of Workforce Services has also contributed $500,000 to the program. GOED is hoping to secure additional funding from the Utah Legislature and/or the federal government. About $2.3 million in Technology Commercialization and Innovation Program (TCIP) funds might be available but would require legislative approval.
Details about the bridge loan program are at coronavirus.utah.gov.