ROCKFORD – Chad Tuneberg took a three-hour walk downtown Friday afternoon, a day before Illinois residents were asked to take shelter in place.
The alderman of the 3rd district found businesses barely hanging on in the middle of the new coronavirus pandemic. Some business owners said they were in desperate need of help, while others distributed stocks of perishable goods to employees and the needy and closed indefinitely.
There was fear and uncertainty, but also, he said, resilience.
“What I saw was sobering and heartbreaking,” Tuneberg said.
On Wednesday, Tuneberg joined Mayor Tom McNamara, Winnebago County Board Chairman Frank Haney and Rockford Local Development Corp CEO. John Phelps to announce a county-wide program that could help save some small businesses. The plan is to use a one-time collaboration to offer emergency loans to keep them waiting until federal aid arrives.
What is envisioned as 90 day bridging loans would range from $ 5,000 to $ 50,000 at an annual interest rate of 6%.
The loans could help small businesses hold on for a few months until they can be repaid with the proceeds of federal disaster relief loans that the small businesses would subsequently get from the Small Business Administration, the said. city administrator, Todd Cagnoni.
“This will be an attractive and necessary loan program for many small businesses,” Cagnoni said. “Cash flow is a huge problem when you have unpaid expenses and you don’t have the income you had before.”
The COVID-19 pandemic is causing severe damage to the local economy, but data on the extent of the damage will not be available for weeks or months, Cagnoni said. With social distancing and shelter-in-place orders, Cagnoni said, many workers are seeing their hours cut or being made redundant, especially in the service, retail, restaurant and hospitality industries. .
McNamara said small business owners who put their savings into their jobs could be devastated.
Rockford has worked with local banks and private donors to raise $ 2 million for the loan program, which will be administered by Northern Illinois Community Development Corp., a regional nonprofit arm of Rockford Local Development Corp.
The city plans to contribute $ 250,000, and Winnebago County could match the city’s contribution. Other contributors are Illinois Bank & Trust, WinTrust Bank, Associated Bank, Midwest Community Bank, Northwest Bank, Blackhawk Bank, Stillman BancCorp and Sunil Puri, founder and chairman of First Midwest Group.
The loans charge simple annual interest. A three-month $ 20,000 loan would cost $ 300, Phelps said.
The funds are not meant to go to homeowners or creditors, and those taking the loans should show they have deferments for rent and debt payments, Phelps said.
The money is intended to support operational spending until federal small business loans arrive. These federal loans have attractive terms, including an interest rate of 3.75% and terms of up to 30 years.
Haney said he was impressed with the community’s response to the pandemic.
“Normally, banks compete for business,” Haney said. “Hospitals too. But now you see the two coming together to serve the community in new ways to address the immediate challenges resulting from COVID-19. “
Jeff Kolkey: 815-987-1374; [email protected]; @jeffkolkey