Union Grove creates small business relief program
By Dave Fidlin
Correspondent
With muscle from an already-in-place economic development program, Union Grove officials last week announced plans to offer loans of up to $5,000 to village-based businesses facing sudden hardship from COVID-19.
The Village Board held a special meeting April 6 and conferred with representatives of the Racine County Economic Development Corp. for the logistics around a small business relief program.
Union Grove has a longstanding contractual arrangement in place with the RCEDC for economic development-related planning efforts.
“Due to the immediate cash needs that some businesses may have, this program is intentionally structured to provide an expedited application and disbursement process,” Carolyn Engel, business finance manager with the RCEDC, said.
The plans in motion call for a pot of money — $100,000 — that will be loaned to Union Grove-based businesses. The funds are being used from an existing revolving loan program that has long been in place as a lure to bring new businesses into the village. Prior to COVID-19, the loan program had a balance of $282,000.
Engel said the goal of the small business relief program is to augment other financial lifelines that are coming down the pike from the federal government.
“Businesses are still waiting for those dollars,” Engel said. “I have not heard about any business receiving these funds yet.”
Union Grove’s small business relief program does have a number of caveats in place, including a stipulation the applicant business be in operation within the village for a year.
Other considerations could be the nature of the business’ impact from COVID-19. A hair salon, for example, that had to shut down would be a likely candidate, Engel said. Restaurants, which have been forced to drastically scale back operations, also would be well suited.
Another goal, Engel said, is to apply the funds toward businesses employing a large workforce.
Structurally, the loan program gives applicants the loans at a 0-percent interest rate for one year. A three-month deferral period also is included within the parameters, giving businesses the leeway to withhold immediate paybacks.
Engel and others within the RCEDC initially went before village decision-makers this week with a proposal to cap individual business loans at $10,000. But concerns were raised.
“It seems the first 10 out of the gate are going to wipe it out,” Village President Mike Aimone said before the loan amount was halved to $5,000 per business. “I’d feel bad for the other ones that might not be so quick to act.”
Questions about interest percentage payments after the one-year mark also were raised with an ultimate decision to revisit the issue at a later date.
“You’d have to see where the economy is at,” Engel said, pointing to the difficulty of making long-term projections with so many unknowns currently in the balance.
While the small business loan program likely is not the be-all, end-all solution to the challenges facing village businesses, Aimone said he was pleased Union Grove was in the position to offer it in the first place.
“I’m really thrilled that as a community, as a Village Board, we’re able to help out these businesses at this time,” Aimone said.
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