Brandon Revolving Loan Fund responds to local business needs
A COVID-19 Loan Response program, made possible through Brandon’s Revolving Loan Fund, has been established to help keep local businesses afloat.
This week, the Brandon City Council and the Revolving Loan Fund board of directors authorized $300,000 of its current fund balance. Loans in increments of $10,000 or $20,000 will be issued to Brandon businesses at zero percent interest. Payments will be deferred through Dec. 31, 2020, and then amortized over five years. There will be no pre-payment penalty.
The allotted $300,000 has the ability to assist 15 to 30 businesses, depending on the amount requested. Loan funds may be used to cover rent, payroll, utilities and inventory.
“We have a short shelf life to respond,” said Steve Tripp, president of the Brandon Revolving Loan Fund Board of Directors. “And we have to do what we can, we don’t have an option.”
Tripp said the idea came to him in the early morning hours of March 27 when he couldn’t sleep as thoughts swirled through his mind of how the coronavirus would cripple the local economy. While his insurance business has been tabbed as an “essential” business and employees continue to work, he was still concerned about how the epidemic has already impacted other Brandon businesses.
“When I came to work Friday, as a local business owner that’s blessed to be in the essential piece, I knew something needed to be done,” he said. “Speed is the big thing and we have to do this for our community, there’s not an option. We know this is not the final fix because there are some great programs coming from federal and state sources, but they will take time and they will take paperwork.”
After sharing his idea with the Revolving Loan Fund board, the board went to work on some additional adjustments, and then gave it unanimous support. Tripp presented the plan to the Brandon City Council March 31.
“Collectively, between the board, Mayor Lundberg, the city council, Bryan Read, Christina Smith and Lisa Marso, we quickly acted on this and they approved a great thing for our community between the private sector, this board and the city,” he said. “As Brandon, that’s who we are, that’s why we’re doing this, and it’s so cool that the city of Brandon and the mayor have all got behind this program.”
The COVID-19 epidemic is estimated to negatively impact local sales tax this year by more than $500,000. In the early weeks of the epidemic, Tripp said local business owners are seeing a 30 to 70 percent decrease in sales.
Tripp assures this loan program has “no red tape,” and is intended to be a quick and easy process for the owners to help ease the short-term financial burden.
“This is not an all-inclusive fix, but hopefully it will buy business owners some time until they can navigate the other state and federal programs that are rolling out,” Tripp said.
The loan application has eight questions: Date, business name/FEIN number or Social Security number if sole proprietor, address, phone and email; description of business; how many years in business; total employees and how many are still working; sole income of business; legal structure of business; and admission if filed for bankruptcy in the past.
No financial information is required.
From the time the application is received, funds will be issued in swift manner, Tripp said.
“Our goal is to have the first set of applications to the city prior to their April 6 meeting and checks will be cut the following day,” he said. “Normally, this is not the speed that government works, and that’s what impresses me the most. In discussions with local business owners, people’s lives are being affected now, and while there are programs at the state and federal levels that will work for these businesses, it will just take time.”
Mayor Paul Lundberg said the city council will meet in special session to approve multiple loan applications, if warranted.
Business owners will request and submit their application via email to Tripp at SteveT@mckinneyolson.com, signing the application with an e-signature. From there, the application will be reviewed and approved by the Revolving Loan Fund board. The application is next forwarded to Christina Smith, Brandon Finance Officer for final approval by the Brandon City Council. If approved, Smith will issue the check to the applicant or Tripp will deliver to the intended business while following social distancing protocol.
If the funds allotted to the COVID-19 Response Loan program are depleted, Tripp said he is willing to work with the State of South Dakota, the city and the Revolving Loan Fund board to find other solutions.
“Of course, we can’t make any promises,” he said.
The Brandon Revolving Loan Foundation was established June 15, 1987. Its purpose is to promote the interests of the City of Brandon through assisting commercial and industrial businesses through revolving loans and other economic development activities.
The Loan Foundation is governed by a board of directors, whose primary function is to receive and evaluate revolving loan applications and make loan recommendations to the Brandon City Council. Loans can be made to induce a business to locate, expand or REMAIN in the City of Brandon.
For more information, email SteveT@mckinneyolson.com or call 582-6988, and ask for Steve or Solveig regarding the Revolving Loan Fund.
