NORWALK — The City Council July 21 unanimously approved changes to its previously approved small business loan program, which can now increase loans and help finance business activities, officials said.
On May 19, the council approved $700,000 to fund forgivable loans to businesses affected by the COVID-19 pandemic with a maximum loan of $10,000 per businesses to assist with past due rent payments.
The changes include increasing the loan maximum to $35,000 per business and covering added costs such as constructing barriers between work stations and moving dining and other services outdoors.
Norwalk approved outdoor dining for restaurants June 16.
In a joint report to the council, Community Development Director John P. Ramirez and Housing Manager Nida Watkins recommended the changes, noting that “to date, the city has received 56 applications for this program. The city has approved 15 applicants and signed loan documents with six businesses.“
The allocation does not affect Norwalk’s bottom line as the money will come from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), approved by Congress and signed by President Trump March 27 to combat the spread and impacts of the coronavirus disease.
Through the CARES Act, the U.S. Department of Housing and Urban Development granted Norwalk an additional $747,572 in community development block grant funds to be used to assist businesses impacted by COVID-19.
“These funds may only be used to prevent, prepare for, and respond to COVID-19,” Garcia and Watkins said in their report. “HUD has established guidelines for CDBG-CV funds to maximize the availability of funds.”
The city proposes to revise the current small business loan program to include additional economic development assistance to existing businesses. The new loan program would include assistance to businesses that have fallen up to three months behind in their utility payments, assist with the purchase of supplies and materials associated with preventing the spread of COVID-19 and assistance with costs associated with the construction of boundaries necessary to operate under current health department guidelines.
“This could include preparing for outdoor dining, installation of barriers between stations in a nail salon or barber shop, as well as other costs,” the report said.
“The city anticipates allocating additional CARES Act funds to assist private, for-profit entities to avoid job loss due to business closures from social distancing.
This includes providing capital assistance to small businesses to create and retain jobs, which will be held by low- and moderate-income persons in the city. The increased amount will enable businesses to use the federal funds to assist with the preparation, prevention and response to COVID-19.
By Arnold Adler