Buffalo News: Storm damage is focus of business loan fund
Storm damage is focus of ECIDA business loan fund
BY: David Robinson
Businesses that incurred damage during last month's lake-effect snowstorm can get loans through a new $2 million fund being set up by the Erie County Industrial Development Agency.
The Disaster Relief Loan Fund will provide loans from $5,000 to $500,000 to help businesses recover from losses incurred during the storm that dumped upward of 7 feet of snow on some parts of the Buffalo Niagara region.
"Small businesses are the backbone of our economy and so many have suffered some kind of losses or damage that insurance may not fully cover," Erie County Executive Mark C. Poloncarz said in a news release. "The goal of this program is to make them whole again."
The fund would be operated through the Regional Development Corp., or RDC, an affiliate of the Erie County IDA, which approved the loan program during its meeting on Wednesday. Funding for the loans would come from the Regional Development Corp. and would not require money from taxpayers.
"Part of our mission at the ECIDA is helping existing Erie County businesses prosper and grow," said Steven W. Weathers, the IDA's president and CEO. "Our RDC loan division came up with a plan to hopefully fill some of the financial gaps that might be created by shortfalls in insurance coverage or other factors." Weathers said he thinks the disaster loan program can make decisions on loan applications quickly, helping local businesses get back on their feet faster.
"Our thing is not the terms and conditions. Its the expeditious execution of this," he said.
"I think it's a wonderful idea," said RDC board member James F. Doherty.
Loans of less than $250,000 can be approved fairly quickly, with loans of less than $50,000 requiring only the OK of the regional development agency's staff, while loans of less than $250,000 must be approved by its loan committee. That process could take less than two weeks, said John C. Cappellino, the IDA's executive vice president. Loans of more than $250,000 must be approved by the regional development agency's board of directors, which meets monthly.
The loans can be used for a variety of purposes, ranging from working capital, machinery and equipment to real property financing. Other potential uses include construction or property improvements, along with bridge funding that may be needed by businesses until they receive their insurance payments or funds from state or federal disaster programs.
The loan program isn't limited to businesses affected by the November snowstorm. Funding also will be
available for future events, including those in other parts of the country, that are declared disasters by
federal, state or local authorities and hurt businesses in Erie County.
The loans, which will carry a 4 percent interest rate and a seven-year term, are open only to businesses that have been operating for at least two years and meet the agency's credit requirements.
Applications for the loan program are available online at www.ecidany.com/disaster-loan-fund
Eligible businesses must be located in Erie County and be able to document the economic or physical harm that they suffered during the storm. Any assets purchased with the loans must be located in Erie County. Not-for-profit entities are not eligible.