Gov. Edwards announces state-led program to help small businesses affected by COVID-19 pandemic
Firms of fewer than 100 employees will be able to borrow up to $100,000 at below-market interest rates
BATON ROUGE, La. (WAFB) - A lot of small business owners are taking this stay-at-home order day-by-day and just trying to make ends meet. Thankfully, that’s keeping a lot of people employed.
Help and hope are now on the way for those small business owners.
Small businesses is Louisiana with fewer than 100 employees can now apply for the Loan Portfolio Guarantee Program, says Governor John Bel Edwards.
The victims of the coronavirus often get lost in the numbers, but while life is what really matters, sometimes the numbers can really get you too, especially when you’re trying to keep people employed.
The popular and once hot spot, White Star Market along Government Street, is no more. The owners say the stay-at-home order just killed them.
These are troubling times for small businesses everywhere, and most are closed.
Restaurants like Elsie’s Plate & Pie are open, but are barely getting by.
“There is no budget anymore. It’s just, are you making enough money? Does it make sense to keep doing it, so that you don’t have to lay people off?” said Paul Dupré, the owner of the restaurant.
Dupré says takeout and delivery orders can only do so much, and they’ve had to cut employees’ hours just to keep going.
“There’s a lot of worry that it [stay-at-home order] will be extended even further. How long can you go on without making any profit? And that remains to be seen,” he said.
A new program that the governor announced Wednesday, April 1 will offer up to $100,000 to small businesses in Louisiana that are impacted by the COVID-19 crisis.
“There is no interest applied and no payments due for the first six months. These loan decisions will be made by local bankers who know their communities and know these businesses and these business people. After the first six months, interest rates will be no more than 3.5%,” said Gov. Edwards.
“If the small business owner uses that SBA loan to keep people on the payroll, then they will get that money forgiven as a grant. And they do not have to pay it back as a loan. So that’s the effort to keep people employed and help small businesses through this rough patch,” said Senator Cassidy.
READ THE OFFICIAL PRESS RELEASE FROM THE GOVERNOR BELOW
Today (April 1), Gov. John Bel Edwards announced a new Louisiana Loan Portfolio Guaranty Program, which will offer loans of up to $100,000 to Louisiana small businesses of fewer than 100 employees that are impacted by the COVID-19 crisis. To help Main Street and rural businesses sustain operations, the loans will require no payments for 180 days and carry below-market interest rates of no more than 3.5%.
The Loan Portfolio Guaranty Program, or LPGP, is a partnership of Louisiana Economic Development, which will provide a loan guaranty fund; the Louisiana Bankers Association, whose membership will provide the loans; and the Louisiana Public Facilities Authority, which will administer the program. A total loan pool of $50 million will be quickly disbursed to eligible small businesses across Louisiana.
“Time and again, Louisianans have demonstrated the desire and commitment to help their neighbors in times of crisis,” Gov. Edwards said. “The Loan Portfolio Guaranty Program is another great example of that service. So far, we have commitments from more than 30 banks across Louisiana who have agreed to participate in this program. We believe it will be instrumental in helping our small businesses recover from the COVID-19 crisis.”
The Louisiana loan program partners — LED, LBA and LPFA — envision helping small businesses meet critical needs for operating their firms during and beyond the disruption of the COVID-19 pandemic.
“The beauty of this program is we are not competing with the essential financial products offered by the U.S. Small Business Administration — we are complementing SBA,” LED Secretary Don Pierson said. “Our bankers know their customers well. They have confidence in the LPFA to administer this program in a professional, proactive manner; and they have the further confidence of an LED loan guaranty fund that will enhance the security of these loans.”
LPGP loans will provide up to $100,000 in immediate financing to help small firms impacted by COVID-19 meet their payroll, retain employees, pay their rent and mortgages, and keep their lights on and their doors open. Interested businesses may find loan details at OpportunityLouisiana.com/covid19, and a list of participating bankers will be posted at the site by Friday as banks complete their participation agreements.
“Louisiana banks play an important role in economic activity, and continue to do so during disaster recovery,” said Louisiana Bankers Association CEO Robert Taylor. “The work Louisiana Economic Development and the Louisiana Public Facilities Authority have done on this loan guaranty program for small businesses is great. We appreciate the opportunity to get the program details out to all the bankers in the state. The can-do spirit of everyone involved has been very positive.”
“The LPFA has an extensive history of assisting the State of Louisiana in some of its most challenging times,” said President and CEO James W. Parks II of the Louisiana Public Facilities Authority. “I am pleased that LPFA’s experience and capacity has allowed us to quickly bring this program forward. Access to funding for Louisiana businesses is a priority, and by working with our Louisiana banking community we can make loan decisions here in Louisiana. This state guaranty program will leverage available funds and enhance eligibility.”
Through the program, bankers will have the flexibility to extend loan terms for up to five years, while interest rates will be below conventional commercial lending rates and no higher than 3.5%. To date, participating banks have requested allocations for about two-thirds of the $50 million in loan capacity available through LPGP.
Other lenders interested in participating should contact LED by calling Business Development Manager Kelly Raney at 225-342-0411 or by emailing LEDSmallbizloans@la.gov.
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