HARLINGEN — In a remarkable gesture to the city’s small business community, officials announced Wednesday a $1 million fund for restaurants and retailers unable to secure federal emergency economic aid.
The zero-interest loans to offset COVID-19 economic losses, called Harlingen’s Emergency Loan Program (HELP), can total as much as $10,000 per qualifying small business.
“A number of us were thinking simultaneously about how the city could best try to help small businesses that have been hurt by this shutdown and so the Harlingen Economic Development Corporation started with a survey and there was talk about what we might be able to do and it just kind of developed from there,” Mayor Chris Boswell said Wednesday.
“The economic development corporation came and proposed this, and fortunately there’s ample reserves with the economic development corporation,” he added. “This is something they could afford to do.”
The proposal was hammered out Tuesday night in a joint meeting with HEDC and the City Commission.
Harlingen business owners can begin applying for the zero-interest loans as early as May 1. A five-person committee is being formed to review applications and rank them.
There are several restrictions. Businesses must:
– Have applied for the Economic Injury Disaster Loan (EIDL) with the Small Business Administration or a Paycheck Protection Program (PPP) through a local lender and been rejected, didn’t take the loan, and provide additional information.
– Show a loss of revenues greater than 25 percent during the COVID-19 crisis period versus last year. If it’s a new business, the owner must provide evidence of extreme hardship.
– Had fewer than 25 employees in Harlingen as of March 1.
– Commit to keeping their business in Harlingen.
The disbursement of the HEDC funds will be a five-round process with the initial $200,000 disbursed to 20 or more applicants depending on their needs and other factors. Four additional loan awards will be done every two weeks until the $1 million is gone.
“There are some issues with the SBA programs in terms of their being overloaded, people have applied to those loan programs and haven’t heard back, and as those people are awaiting those responses, they’re losing more and more,” said Raudel Garza, president and CEO of the HEDC.
“We want to try to fill that gap until they hear back from the federal government and hopefully the federal government will help them out,” he added.
Board members of the HEDC say the decision to help local small businesses hammered by the COVID-19 pandemic shutdowns and the required shelter-at-home orders was easy.
“Our business community is so interconnected and when businesses are hurting, it impacts others as well,” said Mickey Boland, HEDC board president.
“The decision to approve this program wasn’t a difficult choice to make,” Boland added. “Business owners have dedicated their time and lives to providing a service to us, our community, and they are hurting. HELP can give them the assistance they need right now.”
Applications can be made online at www.harlingenedc.com around May 1.
There will be a five-round process with the initial $200,000 being given to 20 or more applicants depending on their needs or other factors. Four additional loan awards will be done every two weeks. Businesses that miss out on one round will be considered in the next round.
For his part, Mayor Boswell said the city’s stable fiscal condition enables officials to step in with programs like HELP.
“Of course, we do have our concentration of retail here, we have a concentration of hospitals here, we have a concentration of other large employers here, and we’re able to leverage all of that into maintaining a really good fund balance, both at the city and at the economic development corporation,” Boswell said.
“I feel good that in a time like this that we do have the financial resources to be able to help.”