Revolving COVID loan fund remains available for businesses in the capital region


CAPITAL REGION – While the federal loan program for struggling small businesses amid the COVID-19 pandemic ran out of money last week, a local alternative is still available.

The Capital Region Advancement Fund is only a tiny part of the federal payroll protection program – $ 8 million compared to $ 782 billion – and its loans will not be converted into grants, like the will do many PPP loans.

But it’s locally run and is available to business owners who missed the window or who don’t qualify for P3 loans.

For-profit businesses in Albany, Columbia, Greene, Rensselaer, Saratoga and Schenectady counties are eligible for two to ten year loans of $ 25,000 to $ 500,000 at an interest rate of 1.5%. The Capital Region Chamber administers the program, which is effectively a revolving loan fund, with repayments from older loans recycled into the principal of future loans. It should still work when the pandemic is just a bad memory.

“We have had some success, but we still have money to lend,” House President and CEO Mark Eagan said on Wednesday.

Since the loan fund was announced in September, $ 4.3 million has been loaned to 57 companies, an average of $ 75,000 each; 68% of the beneficiaries were businesses with 10 or fewer employees and 53% were businesses owned by minorities or women.

“So many sectors of the economy are doing well,” said Eagan. But not all companies are doing well just because they are part of a doing well.

“For a number of businesses, it’s really their lifeline to stay open,” Eagan said. “While there are many positive signs, we know that some businesses may be having cash flow issues.”

The fact that Capital Region Advancement Fund loans do not convert into grants like PPP loans will be a sticking point for some potential borrowers. The fund covers borrowers’ closing costs and attorney fees, which can run into the thousands.

Mohawk Maiden Cruises is one of the companies to benefit from the fund’s assistance. Schuylerville’s charter boat service operates on the Hudson River and had to suspend the 2020 season due to COVID restrictions.

This saved money on fuel, but the fixed costs continued unabated.

“Fuel is really a minor expense,” said owner Marla Hodge. “Insurance and winter storage are the killers for us.”

Before COVID hit, she expected the 2020 season to be good. The company relies on small group outings on its pontoon boat and larger groups on its paddle steamer. Group outings were mostly banned last summer.

“It was really a question of whether we could even afford to maintain it,” Hodge said of the paddle steamer named Caldwell Bell.

The company did not qualify for the first round of PPP due to seasonal fluctuations in its finances, and it could not convince anyone to take its bid for the second round.

The House appointed a contact person for their loan program, and Hodge found it much more user-friendly.

“It was really relatively simple and painless,” she said.

With the loan and the easing of the pandemic, she plans to float literally and figuratively during the 2021 boating season.

“I’m sitting on the boat,” she said Wednesday evening. “It’s out of the water but we plan to put it in the water.”

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