Revolving Loan Fund Now Offers COVID Loans to Small Businesses

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BEAR Press Release

The Southeastern Utah Economic Development District (SEUEDD) has a Revolving Loan Fund (RLF) available for businesses that qualify, and now the agency also has money based on the CARES Act to loan because of the COVID-19 pandemic.

“The RLF is a fund that people can either use to start a business, do retention or do an expansion,” said Camille Otto, the RLF loan program manager at the Southeastern Utah Association of Local Governments (SEUALG), “The main intention of the COVID money that is available now is to either retain or create jobs and to make sure that businesses are able to stay open.”

This new funding has a bit different parameters when being loaned out.

“First, a business must be able to show that it has been impacted by COVID,” she explained. “For start ups, they need to show that there is a need for the business or the person needs to create a business. An example is if someone lost their job because of COVID and they want to start their own business, then they can qualify on those grounds.”

The idea behind the fund is to create new jobs and to retain ones that exist. The premise is that for every $25,000 a business borrows, they should create or retain at least one new job. The person starting up the business counts as one job.

“These are loans, not grants,” said Otto. “They must be paid back. The loans span up to a 10-year payback period, and are presently being lent at about four percent.”

Some of the rules on regular RLF money do not apply to the special funds. For instance, a business plan is not needed for the loan to be initially made. Also with the standard RLF loans, applicants must have been turned down for a loan by a financial institution before coming to SEUEDD to look for money; but with the COVID funds, businesses can be loaned money without that having happened.

“Generally, the money can be used for operating expenses, but we don’t want it to be used for just that,” she stated. “We prefer to see it used to buy more equipment, to hire more people or anything that shows growth. We are looking for this money to be used to positively impact the businesses in the long run.”

Documentation required includes business (if not a start up) and personal tax information for the last three years, three years of projections of how a business will perform, a copy of the business structure, licenses and the completion of an application for the loan.

The agency has already loaned out $184,000 of the $660,000 available. The minimum loans can be made for $10,000 with the maximum being $150,000.

“The regular RLF fund is fairly depleted at this point, so the COVID money is what we have to presently lend out. We want to get these funds out to as many businesses as we can that qualify,” concluded Otto.

The loans are available in Carbon, Emery, Grand and San Juan counties. For more information on the RLF COVID funds, contact Otto at (435) 613-0031 or email her at cotto@seualg.utah.gov.

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