The North Little Rock small business council presented to the city council Tuesday a plan to use Department of Housing and Urban Development funds to help small businesses survive economic hardships related to the coronavirus pandemic.
The city council unanimously approved a resolution amending the 2016-2020 consolidation plan, the 2019 annual action plan and the citizen participation plan to expedite grantees' use of the special allocation of funds from the Coronavirus Aid, Relief and Economic Security Act.
The act authorized a $406,388 allocation of CDBG-CV funds to the city of North Little Rock to be used to prevent, prepare for and respond to the coronavirus, according to the resolution.
Robert Birch, director of workforce development and education for the city, said the newly-formed small business council will use the funds to launch the Covid-19 Small Business Economic Support Fund in an effort to stabilize local businesses and retain jobs. He said the fund is to be used as temporary gap financing.
Applicants must have fewer than 20 employees. Applicants also must have been in business for a minimum of years, must be in operation and not currently in bankruptcy, and be able to show a documented loss of income due to coronavirus.
"About 90 percent of the requirements are from HUD," Birch said.
Funds may only be used for payroll, rent and utilities, and business will be required to submit documentation of how loan funds are used.
"This isn't meant for projects or anything like that," Birch said. "This is to get them through the summer."
[DOCUMENT: Draft for NLR covid-19 small business fund» arkansasonline.com/527fund/]
Birch said loans will be given out one-half at a time.
"They will receive half of the funding, then we collect the needed receipts for HUD and they will receive the second half," he said.
The loan is forgivable with 0% interest if requirements are met, according to city documents. The amount of the loan can range from a minimum of $5,000 to a maximum of $10,000. If job retention requirements are not met or completed, the loan must be repaid.
Birch said minority-owned, women-owned and veteran-owned businesses will receive top priority, with 20% of loan funds set aside for them. He said that goes beyond the 15% required by the state.
"Businesses who have not received any other federal or state assistance will also be given priority," he said.
Mayor Joe Smith said the city plans to make the rules public by today and applications available by Friday.
Council member Debi Ross asked Birch if non-profits are included in the plan. He said HUD has made a requirement that non-profits not receive funding from this program.
Birch said the small business council also will provide counseling to small businesses on other options and reopening strategies.
The city council also unanimously approved a resolution to defer the Advertising and Promotion Commission's rental payments on its new headquarters until January because of the coronavirus.
The commission relies on tax revenue to fund its operations, and many of the businesses that pay those taxes have temporarily closed during the pandemic.
"They are going to take a pretty big hit," Smith said. "At least 76 percent."
The headquarters moved this year to the city's new Welcome Center. The commission manages Argenta Plaza, which is only a block from the its new downtown offices.
The resolution states that it's in the best interest of the city to amend the commission's lease for the building to allow the group to stay while it continues to pay utilities.
Metro on 05/27/2020