HARLINGEN — The city’s Economic Development Corporation is launching its biggest loan program to help small businesses recover from the state shutdown aimed at curbing the spread of the coronavirus.
The $1 million Harlingen Emergency Loan Program will offer zero-interest loans of up to $10,000 to about 100 qualifying small businesses that suffered at least 25 percent revenue losses during the month-long shutdown stemming from federal guidelines and state and local orders mandating businesses shut down to limit the virus’ exposure.
“ Obviously, a lot of businesses have been affected by the shutdown,” Mayor Chris Boswell said. “I’m glad we’re going to be able to help some businesses get through and hopefully continue their businesses.”
Today, Raudel Garza, the EDC’s chief executive officer, plans to launch the program’s first round, contacting about 20 selected businesses qualifying for loans.
“ We’re going to be doing this in rounds,” he said. “There’s going to be another round next week and we’re going to keep on going.”
Loan criteria
The EDC, which generates its revenue from a three-eighths-cent sales tax, dipped into its $9.6 million balance to fund the loan program, Garza said.
“ It was money set aside for future projects,” he said. “We felt we’d use some money to help small businesses.”
Garza said about 63 of the city’s 6,500 businesses have applied for loans.
Meanwhile, the EDC continues to accept applications, he said.
“ It’s very restrictive,” he said. “Not everybody qualifies.”
As part of its criteria, the program will offer loans to businesses with 25 or fewer employees which suffered at least 25 percent revenue losses during the shutdown.
“ It’s designed to help those who suffered 25 percent or more in revenue loss in March and April so people applying have to show they lost that,” Garza said. “We want people to be able to recuperate and rebound from this crisis.”
Loan terms
The EDC will offer loans of up to $10,000 to about 100 qualifying businesses, Garza said.
The zero-interest loans, he said, come with terms of three to five years.
The program will give businesses a year to begin paying back the loans.
“ Depending on their ability to pay, they’ll pay back in five, four or three years,” Garza said.
Business can apply for loans on the EDC’s website.
Committee to select businesses
The EDC has set up a committee to select businesses for loans.
“ They’re all local business leaders serving on some other community boards,” Garza said, adding committee members don’t sit on the EDC board.
“ We’re looking to identify people who qualify,” he said. “They’re going to decide which ones need the most help at this time. It’s not an easy task. There’s a lot of need.”
Economic fallout
Last month, officials presented city commissioners with results of an EDC survey showing at least 382 employees had lost their jobs after more than 47 businesses stopped operating while at least 75 businesses “experienced economic injury.”
At City Hall, City Manager Dan Serna is projecting $1.1 million in revenue losses, much of which stems from plunging retail sales tax revenue.
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