NC’s COVID-19 small business loans get more generous, have millions left

A small business loan program funded by the legislature is once again sweetening its terms as it seeks to dole out an additional $53 million before a looming deadline.

After lower-than-expected interest from businesses — many of which are asking for help in the form of grants that do not have to be paid back — the legislature reallocated $50 million from the Rapid Recovery Loan Program earlier this month. That left it with $75 million from the legislature on top of an initial $15 million funding from the Golden LEAF Foundation, which is overseeing the program with the N.C. Rural Center and other lending partners.

As of Tuesday, the Rural Center said the program has issued 1,062 loans, for a total of more than $37 million. That means more than half the program’s budget is left, and the program’s application deadline is coming up on Oct. 15.

Under the terms of the federal coronavirus relief funding used for the program, any money that isn’t spent by the end of the year is forfeited.

So on Tuesday, the Rural Center announced more generous loan terms: Businesses can now borrow up to $250,000 with no payments and 0.25% interest for the first 18 months. Instead of repaying the loan within five years under the previous loan terms, businesses will now have up to eight and a half years to repay the money.

The N.C. Restaurant and Lodging Association said in a news release that the new terms create “a very useful tool to help businesses in the most affected industries as they adapt to the realities of the pandemic.”

Rural Center President Patrick Woodie said that “we are committed to raising awareness that these funds are available through this carefully vetted and proven loan program that’s geared to help small businesses stay on their feet by helping them make payroll, pay rent or pay vendors.”