New loan fund in development by city to support local businesses
BEMIDJI -- In connection with an effort by the community's economic development organization, the Bemidji City Council is creating a loan program to assist business through the coronavirus crisis.
At its digital meeting Monday, the council received a recommendation from staff to tap into the city's revolving loan fund. The fund, made up from leftover money the city receives in state or federal grants, has $900,000 available and is a tool for economic development.
The recommendation, which was to use $250,000 for a special loan program ending Dec. 31, was agreed to by the council. As part of the program, businesses will be able to receive loans of up to $25,000 with 1% interest and 66 months of amortization. For the first six months, no interest will be due.
The city is following the lead of the Greater Bemidji Economic Development, which created a special emergency loan program for local small businesses. Greater Bemidji is investing $250,000 in the fund, and at the end of March, Beltrami County also provided $250,000. Greater Bemidji is also looking to add another $250,000 from the George W. Neilson Foundation.
"The stories we're hearing from business people are pretty heartbreaking," said Dave Hengel, Greater Bemidji executive director. "So we're really thankful that the city is having this conversation."
According to Greater Bemidji, its loan program will work with local banks, where banks would access the fund to support affected businesses. The maximum amount available from Greater Bemidji's program is $50,000, but the organization is expecting an average of around $30,000.
Steve Jones, Bemidji community development director, said he'd been in contact with Greater Bemidji about the subject and noted it would be easier for the city to access its revolving loan fund and make its own program.
In addition to the two local programs, Greater Bemidji is also administering a loan program from the Minnesota Department of Employment and Economic Development. The state program allows loans ranging from $2,500 to $35,000, based on the business' economic injury and need.
The city council also learned Monday that the COVID-19 situation will likely extend into the summer. According to Sanford Health Vice President Medical Officer Dr. David Wilcox, a peak is likely in June.
"We've been able to predict that this isn't a sprint, but a marathon experience," Wilcox said. "We're very early in the stages. It looks like we may start to accelerate our number of cases later in May. We're anticipating a peak in mid to late June, and a taper in August. This is a three or four month proposition that we're at the beginning of."
In total, Sanford of Bemidji has had seven positive cases, 139 negative cases and 17 are pending. Sanford officials noted Monday that these include individuals from out of Beltrami County.
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