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Franklin County LDC creates loan fund for business

MALONE — The Franklin County Local Development Corp. has established an emergency loan fund for businesses affected by the COVID-19 coronavirus and is allowing businesses with existing loans to defer their payments for 90 days without penalty or additional interest.

The LDC Board of Directors voted Friday to create a “small business relief loan fund” to help those businesses being hit by the closures and loss of trade resulting from the virus outbreak. The fund will make loans of between $5,000 and $25,000 available to small businesses and nonprofit groups with fewer than 100 employees for as long as five years to help them through the current crisis, said Russ Kinyon, director of economic development at the county Industrial Development Agency.

The LDC is the financing arm of the IDA.

The money is primarily intended to serve as a “fall back, stopgap” measure to help borrowers as they wait for a federal Small Business Administration emergency loan, said IDA CEO Jeremy Evans. In order to receive the loan, the business will have to show that it has applied to the SBA for an emergency loan or has applied to a bank for an “emergency bridge loan,” a short-term loan that fills the gap until the SBA loan is approved, he said.

“We can’t just be the easy way out for folks,” Evans said. “This is a fund for those folks who are going to fall through the cracks.”

Applying for the SBA loans is one of the key elements local development officials are promoting to help area businesses, and Evans urged those businesses who might want to take advantage of the loans to act quickly.

“Time is of the essence,” Evans said, noting that other areas of the country have not yet been hit by the virus as hard as New York, so the demand for SBA assistance has not yet peaked. As the volume of applications for the loans grows, the time between application and approval — currently about 45 days — will undoubtedly increase, he said.

The loan will carry an interest rate of 4.25%, with no payment of any kind due for the first 30 days and interest-only payments for the next 60 days, with principle-and-interest payments starting after that.

Farm operations will not be eligible for the loans, although agribusinesses and those that create value-added products such as cheese will be able to borrow from the fund, Kinyon said.

The agency will look at possible loans to small family farms that need help to survive on a case by case basis, he added, nothing that there are other avenues for farmers to find financial assistance.

The LDC board also agreed to allow companies with existing loans from the LDC to defer their payments for 90 days without interest, with the potential to push that deadline back if the current crisis lingers. Kinyon said economic development organizations around the state are enacting similar programs to help out businesses being slammed by the coronavirus.

Evans said the two programs approved Friday will be run in conjunction with other efforts on the LDC’s part to help businesses weather the current situation.

The organization is conducting an online survey of businesses to gather information about what kind of help they will need as both the state and federal governments begin offering funds through stimulus bills, Evans said. Having the information on hand will help the LDC help businesses work their way through the paperwork that will inevitably be part of the process of obtaining help through those programs, he said.

A key to getting help — from local, state or federal sources — is to act quickly, Evans said. Many local business owners are proud of their independence and don’t like to ask for help — an attitude that can sometimes harm their chances of getting needed aid, he said.

“The time to ask is now, not when it’s too late,” he said.

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