AUSTIN (KXAN) – Much of the money allocated for Austin’s coronavirus loan program has not yet been granted to small businesses.
The city’s Economic Injury Bridge Loan Program provides loans up to $35,000 for struggling businesses. The money can be used for daily needs like rent, payroll and debt. The loans are not designed to be a primary source of assistance to small businesses.
As of Friday’s application deadline, $648,000 in loans had been approved for 20 small businesses, out of the total $5,672,527 allocated.
The city says it will continue to process applications it has received over the next 30 days.
On deadline day, 90 Austin businesses had applied. That’s out of the 900 businesses who were deemed eligible to receive a loan application.
KXAN asked if the city’s Economic Development Department was getting feedback from businesses that the application process was burdensome or difficult.
“Case managers have not received feedback on the application process being burdensome or difficult,” a spokesperson explained.
Many grant and forgivable loan programs that currently exist (such as Paycheck Protection Program) did not exist when our loan program was created at the onset of the COVID-19 pandemic arriving in Austin,” the spokesperson added.
“The emergence of grant and forgivable loan programs might be a factor influencing whether or not a business owner submits an application for the City’s bridge loan program.”
This comes at a time when many small businesses owners have reported not receiving the coronavirus relief loans they applied for through the U.S. Small Business Administration.
To be eligible for the city’s Economic Injury Bridge Loan Program, Austin businesses had to have applied for an SBA Economic Injury Disaster Loan.
EIDLs provide up to $2 million for small businesses (500 or fewer employees) for a term up to 30 years.
Since the Austin Economic Injury Bridge Loan Program was approved by HUD on a temporary basis, the city says any remaining funding will revert back to original approval for small business expansion lending.