The City of Aiken is currently assisting small-business owners with finding loans to help them weather the coronavirus.
Aiken City Council members passed an emergency ordinance to approve a small-business recovery revolving loan fund at their Monday night meeting, which now gives struggling business owners another option on top of federal loans.
Aiken Mayor Rick Osbon noted at the March 23 meeting that the "speed in which the [loan program] was put together is not common in government on any level," commending the city for its efforts.
The program is a first for the City of Aiken, said Tim O'Briant, the city's economic development director.
The program already has wide interest from small-business owners since its initial announcement, he said.
"The City of Aiken really recognized that we need to step in and protect our community by offering this kind of assistance," O'Briant said. "There has never been a time when, globally, and all across America, [that] this disaster is hitting us at the same time. Resources are strained, and many people are equally impacted."
With the assistance of the Security Federal Bank, the Greater Aiken Chamber of Commerce and Aiken Corporation, the city has put together a package of $1 million to develop a revolving loan program that would be available to fund loans of up to $10,000 for qualifying businesses. All business loans will have a 2% interest rate, City Manager Stuart Bedenbaugh said.
Each partner is contributing following amounts:
- City of Aiken – $500,000
- Security Federal Bank – $250,000
- Aiken Corporation – $150,000
- Aiken Chamber of Commerce – $100,000
The loans will be issued by Security Federal Bank. The funds from the $1 million would only be utilized if a borrower fails to pay the loan off in any unpaid amount – or if the loan "defaulted."
Terms for the loans include an amount of $5,000 or less for one year or an amount between $5,001 and $ 10,000 for two years.
Interest and repayment of the loans would be deferred for six months, but interest on the loan would accrue during that time. There would be no penalty for early repayment.
Potential applicants should note that they must meet five criteria to be eligible for the loan:
- Must be able to demonstrate COVID-19-related impact to business operations incurred March 1, 2020 and thereafter
- Must be a business with a physical location [“bricks and mortar”] within the corporate limits of the City of Aiken
- Must employ 25 or fewer full-time-equivalent employees
- Must hold a City of Aiken business license in good standing
- Meet credit-worthiness and underwriting requirements.
Final lending decisions will be made solely by the city manager or his designee based on an underwriting recommendation from Security Federal Bank.
O'Briant has been conducting business counseling with area business owners in an effort to familiarize them with all federal programs through the Small Business Administration.
The amount an individual small business can access is on an "as needed" basis, O'Briant said, and the city will be evaluating business statements to determine the impact the coronavirus has had on the business.
The city also is working with Aiken's local SCORE chapter – an organization of volunteers who help entrepreneurs and small businesses – with the "rigorous application process" and to act as a "hub" for every program and loan opportunity available to business owners in the area.
"We know some people will qualify and meet the credit terms, and we know some will not," O'Briant said. "We'll have to find ways to help them, but think a lot of people will be very successful in applying [for the loans]."
Interested businesses may access the application on the City of Aiken website and set up an appointment.
A business owner's interest
Many of Aiken's local restaurants are managing to stay afloat by offering takeouts and deliveries – their only option after South Carolina's governor announced a suspension of dine-in and outdoor eating.
Other local businesses, such as Art & Soul of Aiken in The Alley, are just managing to keep their heads above water.
Art & Soul of Aiken's ability to stay open is not based on how much art customers are buying, but whether the artists who rent spaces in the gallery continue their business with them, said owner Kim Rising, who is also a medical practitioner at the Rising Wellness Center.
Rising said they may need to take out a loan for the wellness center due to the "half capacity" of its patients.
Whether Rising will take out a loan for the gallery depends on whether the artists continue to rent space, she said.
The foot traffic for Art & Soul averages about 100 people a week, Rising said, but that number has reduced to only about five people since the coronavirus began affecting Aiken's businesses.
"Any reparations the government makes could make a huge difference," Rising said.