City of Richmond Economic Development Authority approves use of CARES Act funds to convert business loans into grants

The Economic Development Authority (EDA) of the City of Richmond authorized giving participants who have already received a loan through the Richmond Small Business Disaster Loan Program the option to convert those loans to grants.  

 

The city has allocated $1 million of its total $20.1 million federal CARES Act appropriation to the EDA to pay for the program.

 

“Earlier in the year, the EDA stepped up in a big way and provided a loan program to help small businesses keep employees on payroll during the COVID-19 pandemic,” said Mayor Levar Stoney. “With this funding from the city, the EDA will be able to forgive those loans, hopefully relieving some stress on those same businesses.”

 

To date, the EDA has approved 48 loans, totaling $934,920.

 

John Molster, Chair of the EDA stated, “The EDA enthusiastically provided a zero percent interest rate solution to help small business in the city, and we’re glad that those loans can now be repaid with the CARES Act appropriation. We look forward to figuring out how to deploy more financial resources to help our business community.”

 

The city and EDA are finalizing plans to launch a new grant program, using $3 million CARES Act funding, for small businesses that experienced financial losses during the COVID-19 pandemic.

 

Created in April, the Richmond Small Business Disaster Loan Program provided loans of up to $20,000 to eligible small businesses in the city to help pay employee wages.  Under the original program guidelines, payments were deferred for the first six months, with zero percent interest to repay the loan over 48 months.

 

The City of Richmond’s Department of Economic Development is contacting all borrowers under the program to inform them that the loan can be converted to a grant.

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