MONTICELLO — Small business owners struggling during the COVID-19 health emergency will soon be able to apply for a loan to help stay afloat.
The city’s board of works and public safety and the common council each OK’d a plan to make available $50,000 in loans from the Monticello Economic Development Revolving Fund to help businesses within the city limits who have been “adversely affected” by the coronavirus pandemic.
The funds will come from the city’s Economic Development Income Tax (EDIT) fund, which holds deposits of taxpayers’ collected tax on adjusted gross income and is the city’s distributive share from the county’s EDIT fund.
The $50,000 has been shifted into a revolving account, mandated by state law, from which money may be loaned to any borrower for one or more of the following economic development purposes: Promoting significant job opportunities for gainful employment; attracting a major new business enterprise; or retaining or expanding a significant enterprise in the city.
The revolving fund is similar to one the White County Commissioners created in March that paved the way for it to give a $3 million forgivable loan to Indiana Beach Holdings LLC to keep the amusement and water park resort operational.
The maximum possible award for any applicant within the city limits will be capped at $5,000, but because the Small Business Loan Program has limited funding, not all loan requests may be approved or approved at the level requested. Applications will be reviewed by a selection committee.
Terms of the loan will be for a fixed period of two years at 1% interest. If the borrower has satisfied terms of the loan agreement and promissory note by its maturity date, the loan will be forgiven and essentially become a grant — so long as the business stays open during the term of the loan.
Small businesses must be current on all taxes, not in violation of any federal, state or local codes and ordinances, be credit-worthy, and other criteria as determined by the council.
The loan can be used for capital needs, payroll expenses, preventing staff reductions and other critical business expenditures.
Applications will be accepted on a rolling basis, with the first due date of noon May 19. Loans will be awarded on a first-come, first-served basis.
The application process will close at 4 p.m. June 2 or when all funds have been awarded, whichever occurs first.
Loan recipients will be reviewed weekly by the committee and awards will be distributed by the City Clerk/Treasurer’s Office as soon as possible after the award. Initial payments from the original application deadline are expected to be issued May 27.
“The City of Monticello appreciates all the small businesses that make up the fabric of this great city and encourage them to apply for this assistance,” Gross stated in the press release.
The White County Commissioners are currently in the initial stages of discussing a similar program for businesses all across the county.