WINCHESTER — “We have to help because no one else is.”
That’s how Winchester Development Services Director Shawn Hershberger explained the city’s creation of a disaster relief fund for small businesses impacted by the COVID-19 coronavirus.
The city’s Economic Development Authority (EDA) met in emergency session Tuesday morning to establish a $200,000 pool of cash reserved for Winchester businesses affected by government-ordered closings and revenue losses due to the ongoing pandemic.
The maximum loan amount for any business is $5,000, and no payments will be required for six months. The five-year loans will be interest free for at least the first two years, but the EDA will meet again in 18 months to determine if a 2% interest rate should be assessed for the remaining three years of any outstanding loan balances.
Even if the 2% rate is approved next year, EDA Chairman Jeff Buettner said, “This is a lower interest rate than the SBA [Small Business Administration] disaster relief loan.”
Loan applications will be evaluated as they come in, and EDA members Cary M. Craig Jr. and James Imoh will assist city staff in determining the eligibility of applicants.
In order to qualify for a $5,000 disaster relief loan from the EDA, businesses must be located in Winchester and cannot generate more than $2.5 million in annual revenues or employ 25 or more workers. Applicants will be required to specifically demonstrate how the pandemic has reduced their company’s working capital.
City employees, agents and officials, as well as members of City Council and the EDA, are ineligible for assistance from the disaster relief fund.
Proceeds from the loans are intended to assist with a firm’s operating costs, including rent, payroll, utilities, inventory and related expenses.
The fund will remain in place until all $200,000 is loaned out or the pandemic-related business restrictions are lifted, whichever comes first, Hershberger said.
The four EDA members who attended Tuesday’s meeting in Rouss City Hall — Buettner, Craig, Addie Lingle and Lauri Bridgeforth — voted in favor of establishing the relief fund, effective immediately. The three remaining members of the authority — Imoh, Douglas Toan and Tim Painter — participated in the meeting via conference call and expressed support for the measure, but were ineligible to vote because they were not physically present.
“If there’s going to be help for local small businesses,” Bridgeforth said, “it has to come from localities.”
For more information about the EDA’s disaster relief fund, visit developwinchesterva.com or call Hershberger at 540-722-7577.