City of Racine – Mayor Cory Mason announced today the City of Racine is awarding a total of $250,000 in forgivable loans to 18 local companies. The forgivable loans are being made as part of the Racine Small Business Emergency Fund, a newly created City initiative designed to support as many of its small businesses as possible in response to the coronavirus pandemic.
“Racine is fortunate to be home to a number of major corporations more capable of weathering the coronavirus, but as many as three-quarters of companies in our community are small businesses,” said Mayor Mason. “Often, small businesses operate on very slim margins, and may have less than 30 days of cash on hand to continue.”
“Our smallest businesses provide as many as one out of every five jobs locally, but need access to capital right now in order to survive this pandemic, which is why I directed City staff to establish Racine’s Small Business Emergency Fund,” Mason continued.
RG Natural Babies, Northern Lights Gallery, Olde Madrid, Pepi’s Pub & Grill, Varitay Studios, Chit Chaat, Lush Life, LLC (Roberta), Blue Bear Bakery & Catering, Yogi’s Pud’n, George’s Tavern, Divino Gelato, Sticky Rice, Fairwinds Canvas, Kiernan & Laitinen Heating & Air Conditioning, Inc., McAuliffe’s Pub, Mario’s Italian Sports Bar, Beacon Tavern & Grill, and Innovative Dynamic Networks were selected to receive Racine Small Business Emergency Fund loans.
These businesses were awarded a total of $250,000 in loans with a goal of preserving at least 59 jobs. The businesses selected represent three sectors: retail, restaurants, and unique service providers.
How It Works
The City established the Racine Small Business Emergency Fund to provide loans of $1,000 to $15,000 in operating capital to city-based businesses with 10 or fewer employees at the time they submitted an application. The loans are designed to preserve jobs, particularly for low-to-moderate-income residents, and save small businesses by helping owners cover such costs as payroll, rent, utilities, and insurance at a time when many of these businesses are temporarily closed due to the coronavirus.
Under the program, small business owners receiving a six-month Racine Small Business Emergency Fund loan agree to continue, or increase, employment over the course of the loan period. If the small businesses do so and follow other program requirements, the loan will be forgiven.
“We all recognize that small businesses cannot carry additional debt in these times of extraordinary uncertainty,” said Mason. “The Racine Small Business Emergency Fund is designed to provide a helping hand without saddling those who do the right thing with the weight of more debt.”
Immediate Action
The Racine Small Business Emergency Fund was announced on Monday, March 23—the same day Governor Evers announced the Safer at Home declaration directing businesses deemed non-essential to remain closed for a 30-day period. Loan applications were due by 4:00 p.m. on Friday, March 27. Loan checks are already being issued to approved businesses as quickly as owners sign the loan documents.
“In an emergency, Racine residents and business owners need to be able to count on local government to act swiftly,” said Mason. “Our resources are very limited, but I am proud the City of Racine is among the first local governments in Wisconsin to create a rapid response to this crisis.”
How It is Funded
Mayor Mason directed staff to redeploy the remaining $250,000 in economic development-related federal funding the City receives as part of its Community Development Block Grant (CDBG) from the U.S. Department of Housing and Urban Development (HUD). These particular funds were earmarked by agreement with the federal agency for initiatives to preserve or create employment opportunities for low-to-moderate-income residents.
How Businesses Were Selected
The small businesses were selected based on a number of criteria, including whether the business:
- is owned by, or employs, one or more individuals meeting federal guidelines for low-to-moderate-income earners
- is located in key commercial corridors, such as the downtown, Uptown, and the Douglas Avenue areas
- is owned by women, persons of color, or veterans
Some 60% of the small businesses selected are minority or female owned businesses.
Overwhelming Need, Much More Work to Be Done
“The City has invested all currently available federal economic development-related grant monies to the Racine Small Business Emergency Fund, and we are pleased to be able to help the 18 small businesses that have been awarded loans. However, we know the need among our small business community is so much greater,” said Mason.
The City received a total of 139 applications requesting $1.5 million within the 5-day application period, a reflection of the overwhelming scale of the challenge facing small businesses. Mayor Mason indicated the City of Racine will ensure all applicants, whether awarded a loan or not, will be provided with information about other resources. Additionally, the City of Racine will continue to look for more federal, state, and local resources it can leverage on behalf of the community as well as help educate local business owners about other sources of capital, including through the $2 trillion CARES Act just approved by the federal government.
Mason declared, “I know we can help Racine’s businesses make it through these turbulent times by coming together and taking care of each other. The City of Racine will do everything it can every step of the way to help overcome this coronavirus crisis.”