As the North Carolina General Assembly prepares to return to Raleigh on April 28th, one of the bills they are considering would provide additional financial assistance to North Carolina’s small businesses. The current draft bill, entitled “Small Business Emergency Loans” would provide $75 million in additional state funding to the Golden Leaf Foundation, which already administers a loan program for small businesses impacted by disasters. An earlier draft of the bill would have appropriated $25 million for the program, but the most recent draft of the bill increases that number to $75 million.
Under the most recent version of the bill, the Golden Leaf Foundation and its partner organizations would distribute the state-funded emergency loans of up to $50,000 to small businesses that can demonstrate an economic loss as a result of the Covid-19 pandemic with the following conditions:
- Business must have a physical presence in North Carolina.
- Priority will be given to business establishments of 100 or fewer employees (measured at the time of the declaration of the State of Emergency).
- No payments would be required the first 6 months after loan closing, and during that time, the loans would have an interest rate of up to 4%. Thereafter, repayment would commence and the interest rate would increase to not less than 5.5% for the rest of the loan term, which is capped at a total of 66 months.
- If a business has also applied for federal assistance, then the state-funded bridge loan must be repaid with federal dollars received, provided the loan represents a duplication of benefits, and does not negatively impact eligibility for current or anticipated federal funds.
A House committee voted unanimously to approve the bill during an April 21st committee meeting, and the bill will be considered by the full legislature when they return to Raleigh on April 28th.
Information about the program can be found at: https://ncrapidrecovery.org/
For additional information about the loan program, or about the upcoming legislative session, please contact John Hardin or Will Morgan.
