AUSTIN (KXAN) — Austin is allowing hundreds of small businesses who inquired about bridge loans to finish their applications.
Of the more than 1,000 struggling businesses who requested an application for the city’s Economic Injury Bridge Loan program, the overwhelming majority didn’t end up submitting that application before the May 8 application deadline.
The city created the bridge loan program to provide up to $35,000 to small businesses until federal coronavirus assistance money arrived.
Because getting the bridge loan has been contingent on receiving Small Business Administration loans, businesses reported not knowing whether they’d receive the federal funding to pay back the city.
“They looked at it as more of a loss, so they might as well take their loss earlier and just not open up,” said Joshua Hicks, a bar employee on 6th street.
Revised language approved by Austin City Council Thursday extends the program’s application deadline until “all funding is exhausted.”
“The City will accept applications from this group of applicants until funding has been exhausted,” a spokesperson with the city’s Economic Development Department told us. “New inquiries are not being accepted.”
The department says by last Friday, 34 businesses had been approved for a total of $1.1 million in loans.
More than $5.6 million was allocated for the program.
Other changes approved by city council include an option for those businesses who receive bridge loans but aren’t approved for SBA loans.
Those who don’t receive federal assistance have up to five years to pay back the bridge loan if they choose to accept it.
“All proposed changes better align the local program guidelines with HUD’s approval letter language, HUD requirements, and SBA guidelines,” said the spokesperson.
She added that the city is not making any changes that wouldn’t be allowed by HUD and the SBA.
When we started asking about the lack of Austin businesses applying for the Bridge Loan program earlier this month, the city says the program’s rules were dictated by the federal government.
“With respect to the Austin Economic Injury Loan Program (AEIBLP) the approved conditions and use of funds is tied directly to Small Business Administration (SBA) guidelines as approved by HUD,” she told us on May 11.
A Senior HUD Official told KXAN that day: “The City set the lending terms for the small businesses and the application deadline.”