SALT LAKE CITY — Utah small businesses suffering under the economic impacts of COVID-19 may now be able to secure some zero-interest financing to help weather the pandemic.
On Monday, Gov. Gary Herbert announced the Utah Leads Together Small Business Bridge Loan program aimed at helping Utah businesses with 50 or fewer employees with 0% interest loans from $5,000 to $20,000 for up to a 60-month period. Nonprofit businesses are not eligible for financing under the program and loan amounts are limited to no more than three months of the applicant’s demonstrated operating expenses. The start of the repayment schedule may also be deferred for up to 12 months.
The Governor’s Office of Economic Development will oversee the program, which will be seeded with $8 million in “repurposed state economic development funds” as well as $500,000 from the Utah Department of Workforce Services. Late Monday afternoon, Herbert issued an executive order allowing money from the state’s Industrial Assistance Account be used for the bridge loans.
GOED Executive Director Val Hale said the aim of the program is to help keep small Utah businesses afloat amid ongoing economic uncertainty brought on by the COVID-19 pandemic.
“This new program will help many Utah small businesses struggling with impacts from the COVID-19 pandemic and in need of assistance during this emergency in our country and our state,” Hale said in a statement. “We hope that this loan program will help keep Utah workers employed and businesses open for business, at least in some fashion, as we face today’s difficult challenges and uncertain health and economic conditions.”
According to the economic development office, applications will be reviewed weekly by a committee chaired by Hale, and approved by the agency board. Businesses that complete the online application, providing all supporting information and documentation, will be notified of their loan status by email at the beginning of the following week. Applicants will then enter into a contract with the Governor’s Office of Economic Development. Those businesses that apply this week and are accepted could have checks on the way by April 10.
Loan criteria includes:
- Businesses must be established and licensed before Jan. 1, 2020, and in good standing with the Utah Division of Corporations and Commercial Code.
- Applicants must have employees on their payroll for whom they have had payroll taxes withheld (i.e., W-2 employees).
- Applicants must provide six months of estimated lost revenue or other documented loss evidence.
- No collateral requirements.
- Eligible loan uses include working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations.
- Receiving other forms of emergency funding will not disqualify an applicant from receiving loan funds through this program. Still, companies must disclose if they have applied for emergency funding from other sources.
GOED says the program will run for as long as funds are available and indicated it would be seeking additional funding from the state Legislature.
Preference for funding will be given based on specific criteria available online. Learn more about the Utah Leads Together Small Business Bridge Loan program at coronavirus.utah.gov.