Just days after the initiative was announced, applications are now open for the $100 million Chicago Small Business Resiliency Fund. The city is using the money to provide low-interest loans to support local businesses experiencing a temporary loss of revenue as a result of the coronavirus outbreak. Business owners are being encouraged to begin the application process at chicagoresiliencyfund.com.
While it’s not clear exactly how quickly the funds would be available, Mayor Lori Lightfoot made a point of the city’s desire to move more rapidly than the federal government, which has passed a series of stimulus bills to counteract the economic harms of the coronavirus pandemic.
“We know that our business owners and entrepreneurs don’t have the luxury to wait for federal support, which is why with the Chicago Small Business Resiliency Fund, we are putting money directly into the hands of our small businesses now so that they can weather this storm,” Lightfoot said in a press release. “When we support small businesses, we support their workers, who in turn help uplift the vibrancy of our neighborhoods.”
Business owners must use the loans for working capital, with at least 50% of the proceeds applied toward payroll. Loans will be payable over five years with an initial $10-per-month principal payment being all that’s required to maintain the account. Interest rates will be 1% for the first 18 months, increasing to 5.75% thereafter.
Eligible businesses will have:
- Employee counts of 50 people fewer
- Gross revenues of less than $3 million in 2019
- Suffered a revenue decrease of at least 25% due to COVID-19
- A valid business address within the city of Chicago (and valid business license with the city, if applicable)
Priority will go to small businesses serving low- and moderate-income Chicagoans. Another element in the distribution of loans will be the city’s desire to ensure that money is being spread around as much as possible. Officials stressed that they want to cover all areas of the city and all types of industries that have been impacted by the pandemic, noting that a portion of the loan pool will be set aside “to ensure an equitable distribution along these lines.”
Demand for assistance might outpace reserves, however. The city noted that, when the fund was first announced, more than 6,000 queries came in from small businesses interested in learning more about it via an online interest form.
It’s impossible to say how many businesses might benefit from the fund overall, since loans will be based on a business’ average revenues for the last three months of 2019. However, using the maximum figure of $50,000, it would only take around 2,000 businesses to eat up the whole $100 million reserve.
Though not explicitly identified in today’s announcement, city officials hinted that there may be more support for Chicago’s entrepreneurial community coming soon. “You are not alone,” Rosa Escareno, commissioner of Chicago’s Business Affairs and Consumer Protection office, said to Chicago business owners. “We know that this is an incredibly challenging time for so many and we need to take extraordinary steps to support our small businesses. We will continue working closely with our local business owners, business organizations and financial partners to identify more ways to help.”
The funds come from a municipal grant, alongside donations from Goldman Sachs, Fifth Third, Clayco and other private funding sources. The city set up a contact form for those who have additional questions beyond what’s addressed on the fund’s frequently asked questions page.