Tucson businesses with 50 employees or less can get interest-free coronavirus relief loans of up to $25,000.
The loans are part of a $1 million effort backed by the city of Tucson.
On Tuesday, May 5, the Tucson City Council moved to set rules to provide the loans to the neediest of small businesses, including those owned by minorities, women, persons with disabilities and veterans, and to lower-income business owners in general, while distributing the aid geographically.
The Tucson Resiliency Direct Loan Program is administered by the Business Development Finance Corp., a nonprofit that has worked with the city for more than 30 years.
The $1 million in loan funding, approved in late April, consists of $500,000 previously on account with BDFC and $500,000 in new money from a city contingency fund.
“It’s a small effort, but it’s one of the tools we have in our toolbox to deal with this pandemic which has hit our small businesses so far,” Mayor Regina Romero said.
About $670,000 remains in the loan fund, which has been lightly marketed, and the city and BDFC are working on a bilingual loan application for Spanish speakers, said Barbra Coffee, economic initiatives director for the city.
“This is one loan program — there are other opportunities for folks to access capital,” Coffee said, citing a micro-loan program launched recently by the Community Investment Corp., Growth Partners and Kiva Tucson as one example.
Coffee recommended that cash-strapped business owners call the city’s small-business assistance line at 837-4100 for help evaluating all available funding options.
More information and an application form for the Tucson Resiliency Direct Loan Program are available on the BDFC website, bdfc.com/tucson.
During its study session on Tuesday, the council directed city staff to return with new loan criteria for the direct loan program, along with terms that the city funding — which is actually a loan to BDFC — will be repaid to the city as the loans are paid off.
The basic eligibility rules for the Tucson Resiliency Direct Loan Program:
- Eligible businesses must be located within Tucson city limits, have a valid city of Tucson business license, and be registered with the Arizona Corporation Commission in good standing (sole proprietors do not have to be registered).
- Direct loans of up to $25,000 at 0% interest are available to small businesses, sole proprietors, 1099 contractors, and 501(c)(3) nonprofits that meet the eligibility criteria.
- Loan funds must be used for working capital such as rent, payroll, marketing and utilities.
- The loans are repaid over 10 years with flexible payment options, including no payments for the first six to 12 months.
- There is no prepayment penalty and no collateral is required, but applicants who own 20% or more of their businesses must provide a personal loan guarantee.
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