The rush to apply for and receive emergency federal funds during the COVID-19 crisis didn’t reach everyone.
The result of the first come/first serve component of the Small Business Administration-affiliated loans is many American businesses left out of the funding loop. In Harlingen, city leaders and the economic development corporation are doing something about it.
The EDC put aside $1 million in funding in establishing Harlingen’s Emergency Loan Program, HELP. It’s up and running with the EDC accepting applications for funding since May 1. It is now in the midst of assessments in awarding zero-percent interest loans with deferral of repayment until a year after disbursement.
The program seeks to reach small business owners in Harlingen who did not receive funding from the two main SBA loan programs created in the immediate aftermath of the COVID outbreak.
Setting Up Priorities
“Our top priority is to help small businesses that fell through the cracks,” said Raudel Garza, the chief executive officer of the Harlingen EDC. “We want to give people that have been shocked (by COVID disruptions) time to get back on their feet.”
The creation of the emergency loan program came after the EDC conducted an economic impact survey in April. The responses from small business owners in Harlingen showed significant losses were already being felt.
“We wanted to know what was going and how we could help,” Garza said.
He sees the EDC emergency loans as providing “a bridge” for local businesses that are struggling. Applicants for Harlingen’s emergency loans may receive up to $10,000 in funding.
Local businesses must meet four criteria to receive funding: The business did not receive funds from the Economic Injury Disaster Loan program nor the Paycheck Protection Program. There must be a revenue loss of greater than 25 percent during the COVID crisis period versus previous year. The business cannot employ more than 25 employees in Harlingen. Finally, the business owner must commit to keeping their business in Harlingen.
There will be a five-round process with an initial funding of $200,000 to 20 or more applicants. Four additional rounds of loan awards will then take place every two weeks.
“Business owners have dedicated their time and lives to providing a service to us, our community, and they are hurting,” said Mickey Boland, the HEDC board president, in a statement released by the EDC office. “HELP can give them the assistance they need right now.”