AUSTIN (KXAN) — Small businesses in Austin can now apply for a loan through the Austin Economic Injury Bridge Loan Program.
The loan program, created by the City of Austin’s Economic Development Department, will allow small businesses to apply for a loan up to $35,000. There is $6 million allocated to the program, and the program is set up to help up to 170 businesses.
City officials told KXAN they’ve already received more than 200 requests for application.
The local loan is designed as a stop-gap to help businesses keep employees until they receive emergency funds through the U.S. Small Business Administration Economic Injury Disaster Loan Program.
“We understand that small businesses in Austin are still navigating the road to economic recovery,” said Veronica Briseño, economic development department director. “The Austin Economic Injury Bridge Loan Program will help small businesses retain employees and pay for expenses like rent and fixed debt. This is one of the many ways our department is supporting small, local businesses experiencing economic loss due to the COVID-19 pandemic.”
To be eligible for the program, businesses must be headquartered in a city council district and applicants must “demonstrate an economic loss associated with the COVID-19 pandemic.” They also must have applied for the SBA disaster loan.
All loans have a 3.75% interest rate and must be paid back in 12 months.
“This is just one piece of many solutions we are looking at,” Briseño said. “We realize the need is great in our business community and our Austin economy, and we’re providing this as one tool.”
Many people still waiting on the SBA loans
According to the SBA, a business owner can take out up to $2 million in a loan through the SBA’s Economic Injury Disaster Loan program.
In Texas, 1,242 EIDL loans have been approved, amounting in $263,469,600. Financial institutions have also processed 63,815 EIDL Loan Advances.
Another loan program available through the SBA is the Paycheck Protection Program. The agencay said “Texas has approved 134,737 loans amounting in $28,483,710,273.”
However, many business owners told KXAN they are still waiting because the paycheck program ran out of money before their applications could be processed.
Carlos Sosa, a musician in Austin, said he’s still waiting.
“A lot of my peers, musicians are completely broke,” he said. “The music world kind of stopped. Nobody can go to concerts. Nobody can have private events.”
He said at first, he couldn’t find any information from his bank about how to apply. He tried smaller banks, and by the time he was able to submit his application, he said, “The next day, I see all over the news and stuff that all the money’s gone.”
The U.S. House of Representatives is set to vote Thursday on a measure that would add $310 million to the Paycheck Protection Program.
Sosa said, “I don’t know what to expect. I’m not very hopeful. From my experience, I don’t know if it’s going to happen, and I’m not going to bet on it because of what’s happened already. If it does, something good does come out it or me and my employees get some sort of relief, that would be amazing.”
Grants for small businesses through private entities
Because of the increased demand for financial support, Briseno said, “We get that this is a unique situation and the need is great, so we’ll definitely work with businesses.”
She told KXAN the Economic Development Department has “redeployed 10 employees, and we’re actually looking to assign additional employees to serve as what we are calling case manager. We think it’s important one on one with each business and help them identify resources.”
The City of Austin has a database that business owners can use to find help, both from public and private entities.
One new resource that became available Wednesday is Facebook’s grant program.
The tech giant is giving out $2.5 million to qualifying Austin businesses. They expect to help about 600 small businesses with that money.
Katherine Shappley, Vice President Global Business Group, said “Our small businesses are really what gives us color and the uniqueness that make Austin Austin. We have heard loud and clear that financial support and financial support fast will go a long way.”
You have to have between two and 50 people in your company and have been operating for a year to be eligible.