CAPITAL REGION — While the federal loan program for small businesses struggling amid the COVID-19 pandemic ran out of money last week, a local alternative is still available.
The Capital Region Advancement Fund is a tiny fraction of the federal Payroll Protection Program — $8 million vs $782 billion — and its loans won’t convert into a grant, as many PPP loans will.
But it’s locally run and it’s available to business owners who missed the window or didn’t qualify for PPP loans.
For-profit businesses in Albany, Columbia, Greene, Rensselaer, Saratoga and Schenectady counties are eligible for two- to 10-year loans of $25,000 to $500,000 at 1.5% interest. The Capital Region Chamber is administering the program, which is actually a revolving loan fund, with repayments on older loans recycled into the principal of future loans. It should still be running when the pandemic is just a bad memory.
“We’ve had some good success but we still have money to lend out,” Chamber President and CEO Mark Eagan said Wednesday.
Since the loan fund was announced in September, $4.3 million has been lent out to 57 companies, an average of $75,000 each; 68% of the recipients have been companies with 10 or fewer employees and 53% have been minority- or women-owned enterprises.
“So many sectors of the economy are doing well,” Eagan noted. But not every business is doing well just because it is within a sector doing well.
“For a number of businesses it truly is their lifeline to remain open,” Eagan said. “While there’s a lot of positive signs we know that there are businesses that may have problems with cash flow.”
The fact that loans from the Capital Region Advancement Fund won’t convert to grants like PPP loans will be a sticking point for some potential borrowers. The fund does cover borrowers’ closing costs and attorney fees, which can run into the thousands.
Mohawk Maiden Cruises is one of the businesses to receive assistance from the fund. The Schuylerville charter boat service operates on the Hudson River and had to sit out the 2020 season because of COVID restrictions.
It saved money on fuel but the fixed costs continued unabated.
“The fuel is really a minor expense,” owner Marla Hodge said. “Insurance and the winter storage are the killers for us.”
Before COVID hit, she expected the 2020 season to be a good one. The business relies on outings by smaller groups on its pontoon boat and larger groups on its sternwheeler paddleboat. Group outings were mostly a no-go last summer.
“It was really a matter of if we can even afford to keep her going,” Hodge said of the sternwheeler, named Caldwell Bell.
The business didn’t qualify for the first round of PPP because of the seasonal fluctuations in its financials, and she couldn’t get anyone to take her application for the second round.
The Chamber has a designated contact person for its loan program, and Hodge found it much more user-friendly.
“It was really relatively painless and simple,” she said.
With the loan and the easing pandemic, she plans to be afloat literally and figuratively in the 2021 navigation season.
“I am sitting on the boat,” she said Wednesday evening. “It’s out of the water but we’re planning on putting her in the water.”