HUNTSVILLE, Ala. - Not only are community leaders trying to deal with the spread of the novel virus, but they are also taking steps to aid the local economy and struggling businesses. On Monday, a Huntsville-based nonprofit announced it's offering a new loan option for small businesses affected by COVID-19.
Out of the 8,000 businesses in Huntsville, 94% have 50 or fewer employees, according to city officials. The non-profit Neighborhood Concepts hopes a loan they're providing could help fill a gap for businesses that may not be eligible for other programs.
"Those who have been hit the hardest are the restaurant hospitality industry," Huntsville Mayor Tommy Battle pointed out at a press conference Monday.
Canceled trips and sweeping changes to the way people eat out are creating an economic ripple effect.
"As all of you are aware, it's the small businesses in our community that are really struggling right now," said Mary Ellen Judah, executive director, Neighborhood Concepts.
Judah says it's important to throw a lifeline to businesses struggling in the rough waters of a global pandemic.
"Local businesses are what drive the local economy, and they employ folks, and they contribute to our quality of life," she said.
Judah says the nonprofit is acting through its subsidiary, North Alabama Revolving Loan Fund LLC, to offer working capital loans up to $25,000 to help small businesses cover operating expenses that their monthly income isn't able to cover due to COVID-19.
She says this option is for businesses that may not qualify for an SBA loan or for those that might not be able to get a loan through a financial institution.
"Those who may not qualify for some of those other programs out there, we recognized that there was going to be a need. And so on Friday Neighborhood Concepts board of directors authorized an emergency line of credit loan product," she explained.
Judah says part of the reason the nonprofit is able to serve this specific group is due to the fact that the nonprofit isn't held back by the same red tape as banks or other institutions.
"I think the biggest difference is that we are a much smaller organization that is not regulated by the FDIC or the federal reserve. And so we have the ability to be a little bit more flexible in our underwriting criteria than perhaps other financial institutions," she said.
Judah says the loans will be structured as a non-revolving 6-month line of credit at a fixed rate of 5%.
To be eligible for this loan a small business must have been open for at least 12 months. If a startup does not meet that requirement, Judah says to give them a call anyway. They may be able to help business owners find an option that could provide assistance.
Find out more about the loan or about Neighborhood Concepts here: