MANCHESTER — Aldermen voted to use $1 million in city funds to launch a new effort to help small businesses in Manchester recover from the impact of COVID-19.
Mayor Joyce Craig and Mike Skelton, president and CEO of the Greater Manchester Chamber of Commerce, gave a brief presentation on the Manchester Small Business Recovery Loan Fund, saying an initial transfer of $500,000 from the Manchester Development Corporation to the city would be matched by a $500,000 transfer of city funds from a special revenue account.
The vote was 8-7, with Craig casting the tie-breaker. Voting in favor were aldermen Kevin Cavanaugh, Will Stewart, Pat Long, Barbara Shaw, Bill Barry, Normand Gamache, Dan O’Neil and Craig. Opposed were Jim Roy, Tony Sapienza, Elizabeth Moreau, Ross Terrio, Mike Porter, Keith Hirschmann, and Joe Kelly Levasseur.
“Our small businesses need our help and support during this unprecedented time and this low-interest loan fund will incentivize small businesses in Manchester to reopen and resume normal operations,” said Craig.
“I’ve spoken with 12 or 15 businesses, and what I got back almost across the board was appreciative,” said O’Neil. “Some said they may take advantage of it, some said they may not, some said they don’t know. I think there’s checks and balances, we’re not just giving the money away.”
“My concern with this is we don’t know the scope of this, how long it is going to last,” said Roy. ”Until I’ve got a firm grasp on that, I’m not going to vote to give money out of any of our accounts.”
“There may be other partners out there that want to contribute,” said Skelton.
“We don’t have to do this right now, because the stay-at-home order ... we have no idea when that’s going to be lifted,” said Sapienza. “I can’t support it at this time and I will not support it without any language that the owners will be personally liable (for the loans).”
“I see great benefits when we help these businesses open” and get people back to work sooner, said Craig. “I see a benefit to the local taxpayer with these funds.”
“This is a knee-jerk reaction to a crisis we’ve never endured,” said Porter. “I think touching reserve accounts right now would be irresponsible for the future. Right now we have no guarantees, and many of these loans are dischargeable in bankruptcy.”
“Yeah, there’s unknowns, but sometimes you’ve got to help out,” said Cavanaugh.
“We don’t want a ghost town on Elm Street, or anywhere else in the city,” said Shaw. “This is just getting the ball rolling. I support it.”
The structure of Manchester Small Business Recovery Loan Fund is proposed as follows:
• $1,000,000 in initial funding from the city of Manchester, allocated from special revenue account and Manchester Development Corporation (MDC), with additional funding to be sought from other partners;
• Maximum loan amount of $25,000 and interest rate at 2 percent. At this maximum loan amount and $1,000,000 in initial funding, 40 small businesses can participate;
• Eligibility restricted to any Manchester small business that experienced loss of revenue or closure due to the COVID-19 emergency. MDC will create specific definitions and guidance on eligible small businesses;
• Eligible uses: Loan funds must be restricted to costs associated with resuming operations: working capital, payroll, workforce recruitment and inventory. No capital improvements permitted;
• The program would start no sooner than June 1, 2020, “assuming the public health situation is improving,” and the closure of business order is lifted. Applications could be submitted in advance of this date;
• Application process will be based on the existing Queen City Loan Fund process;
• Loan terms would be as follows: 60 months for loans from $15,000-$25,000, 36 months for loans under $15,000. A $25,000 loan for five years at 2 percent is a monthly payment of $438.19, with no interest or payments due for three months.
• Capital Regional Development Corporation would serve as the loan underwriter on behalf of MDC. The MDC will provide monthly reports to aldermen on the use and performance of the loan fund.