Officials update forgivable loan program
A program for small business affected by Hurricane Ike in Orange, Hardin and Jefferson counties – the application deadline of which was Jan. 8 – has gotten phones ringing at economic development offices in all three counties wondering as to the program’s money status.
Of $190 million Southeast Texas was awarded in Hurricane Ike Round One recovery funds, $1.9 million was earmarked to assist small businesses in their recovery from physical or economic losses sustained as a result of the disaster. Funds will be awarded as forgivable loans and recipients will not be required to pay back the funds as long as they remain in business for two years after the disbursement. The maximum funding limit is $25,000 for existing businesses. Additional funds have been allocated to stimulate new businesses willing to locate to storm surge areas such as Bridge City.
In a statement released by Shaun Davis, executive director of the Southeast Texas Regional Planning Commission, he said, “Given the overwhelming response to this program (700-800 applicants), there is no question that the need for this type of recovery assistance is desperately needed to bring our region back from the negative effects of this massive storm. It is certainly understandable that your frustration grows everyday this funding is delayed. Let me assure you that every person working on this program is pushing as hard as we can to meet the extensive and time consuming program and documentation requirements mandated by these types of funds.”
The good news, he continued, is that thanks to the aggressive and pro-active efforts of the Southeast Texas Economic Development Foundation, the Golden Triangle region is months ahead of other areas of the state in implementing similar programs.
“[The foundation] chose not to wait on the state and federal governments to start the process of getting these funds where they needed be. . . . IN YOUR HANDS,” he said. “This type of program has not been tried before. We are actually setting the standard as we implement this program. In fact, another entity (they haven’t even started yet) has asked to use our model in their area. So, while we are ready to go locally, the final part of this process must be signed off on by entities further up the chain. We have received assurance and have every confidence that they are pushing as hard as they can the get the necessary approvals in place. I humbly ask for your continued patience and perseverance in this process.”
Jim Rich, foundation executive director, said volunteers said rating scores were given to applications factoring in credit, length of time in business and impact of the business on the community. Points were applied based upon a scale that measured the degree of rain, wind and flooding on each business location as a result of Ike. Additional points went to businesses in low to moderate income census tracts.
“Arriving at the top 90 or so businesses, we are conducting site visits to verify business ownership, address environmental regulations and determine the use of funds,” Rich said. “We still need to complete the visits, publish the results and verify other factors such as the payment of taxes.”
He added, “This is a competitive application process with the primary purpose to help stimulate the economy. It is a forgivable loan program as long as the business is open two years from now and meets federal low to moderate income requirements. We initiated this program before anyone else. It has never been done before. We were given regulations and requirements as we went along. It is a lot of work with a volunteer loan committee representing three counties. The good news is we are almost there.”