The Castle Rock Town Council at its last meeting approved another $600,000 in aid for small businesses amid the COVID-19 pandemic as well as amendments to a loan program it initially approved during …
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The Castle Rock Town Council at its last meeting approved another $600,000 in aid for small businesses amid the COVID-19 pandemic as well as amendments to a loan program it initially approved during a March 30 emergency council meeting.
Mayor Jason Gray called the town's aid programs unprecedented action in an unprecedented time.
“This kind of thing is amazing,” Gray said.
Castle Rock Economic Development Council President and CEO Frank Gray said businesses will likely need assistance now but also in the future because of the shutdowns connected to the pandemic.
“Getting back to business as normal is probably not going to happen the way we understand it until there's a vaccine available,” Frank Gray said.
To help, the council in April approved two programs. One provides businesses up to $5,000 in one-time grant dollars and the other offers them up to $25,000 in loans with no fees and 0% interest.
Applications for the COVID-19 Small Business Support Grant Program opened April 9 and are available through 5 p.m. on April 16. Businesses that have a brick-and-mortar location in town, have operated for at least one year and have applied for federal Small Business Administration loans are eligible. Apply at CRgov.com/BusinessGrants.
The most severely impacted businesses will be prioritized. A committee will recommend how to divvy up the $200,000 in grant money among applicants at the April 21 council meeting.
“We're talking about the central fabric of our community. All the small businesses, they have paid in for year-in-year-out into the revenue of this town. We've depended on the money that they bring in,” Councilmember Jess Loban said. “The citizens of this town depend on these small businesses for employment and for support.”
The loan program will use $400,000 in town funds to leverage up to $2 million in first-come, first-serve loans. The Castle Rock Economic Development Council is partnering with the Colorado Lending Source to run the program.
Colorado Lending Source will service the loans and oversee their administration. The town will look for a banking partner in the coming months who will accept the $400,000 as loan loss protection and then provide up to $2 million in small business loans.
Businesses must be in good standing with the town, have a brick-and-mortar location, have applied for disaster relief or SBA loans and successfully complete Colorado Lending Source underwriting to qualify.
“I want to be upfront with town council on the costs of a program like this,” Frank Gray said.
For council's discussion, Frank Gray presented a program in which the town put up $300,000 to leverage $1.5 million in loans.
The town will cover costs and interest to offer the loans. Costs for Colorado Lending Source to administer $1.5 million in loans would be $135,000 maximum. Castle Rock would also absorb an additional $120,000 in interest if the bank lends the money at 4% interest, although Frank Gray said he expects a lower rate.
Frank Gray said banks are too overwhelmed processing other loans to begin Castle Rock's program immediately but all banks the EDC contacted expressed interest in taking on the program eventually.
Mayor Pro Tem Jason Bower, a small business owner, said he was not sure if he will need to apply to the town's program in the future and abstained from council's vote on the new programs, which passed 6-0.
The town also amended its COVID-19 Kiva Community Loan Program, first approved at an emergency meeting on March 30. Qualified local businesses can now receive up to $4,000 or 50% of the Kiva loan, whichever is less, in town funds.
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