From restaurants to retailers, Kalamazoo small businesses are tapping a financial lifeline to help them deal with the economic impact of COVID-19.
Thus far, the Kalamazoo Small Business Loan Fund (KSBLF) has approved 63 low-interest loans totaling $1,120,600. The fund was created earlier this month through a partnership of the City of Kalamazoo and United Way of the Battle Creek and Kalamazoo Region (UWBCKR).
“Small businesses are both the economic lifeblood of our community and the first to feel the negative effects of the pandemic,” said Chris Sargent, President and CEO of UWBCKR, which is managing the fund. “KSBLF loans are helping them bridge the gap until state and federal aid is available. We’re proud to partner with the City and bring our grant-making expertise to this important work.”
Sargent said the KSBLF is especially vital to supporting working individuals and families who struggle financially—known as ALICE (Asset Limited, Income Constrained, Employed).
“Businesses receiving loans are able to keep paying lower-income workers who can’t endure a lengthy job loss or furlough,” he explained. “Also, the fund is helping many women- and minority-owned businesses stay afloat during this unprecedented time.”
Established with a $2 million grant from the Foundation For Excellence, the KSBLF was designed by UWBCKR and the City based on national best practice models and local assistance from the Upjohn Institute for Employment Research, Kalamazoo Downtown Partnership, and the Michigan Small Business Development Center. It complements other relief programs that are also available to community members, including the UWBCKR Disaster Relief Fund and the Kalamazoo Community Foundation Urgent Relief Fund.
Antonio Mitchell, Community Investment Manager for the City of Kalamazoo and a member of the KSBLF Advisory Committee, said, “The people of Kalamazoo have shown tremendous compassion and kindness supporting those in need through the hardships created by COVID-19. The KSBLF is a continuation of this spirit and we are proud to offer support to the people and small businesses that we all rely on and that make our community such a special place.”
Fund Supports Diverse Businesses
The 63 approved loans run for 36 months, with no interest or payments during the first six month, and 1% annual interest applied over the remaining 30 months.
Here are some details about the small businesses approved for loans:
• 30% are in the service industry, followed by food and beverage businesses at 28%, retail businesses at 16%, manufacturing at 3%, and other businesses (e.g., entertainment, performing arts, legal and compliance, medical and laboratory, etc.) at 23%.
• 36 (57%) of approved loans were for women-owned businesses and/or businesses owned by minorities or people of color. A guiding principle of the KSBLF is to ensure equitable investments across the Kalamazoo community.
Kristi Tyler, owner of Tulips Little Pop Up Shop, said the loan she received from the KSBLF was a vital help for her business and her employees.
“My most pressing concerns were the well-being of my employees and whether or not I could continue to pay them with our doors closed for more than a few weeks and figure out how I could position my business to survive during this time,” Tyler said. “The loan allows me to maintain and pay my staff while continuing to pay overhead costs. Thanks to the generosity of our community, Tulips was provided a safety net during these unprecedented and uncertain times.”
Clarence Gardner, owner of C’s Perfect Tie & Accessories, has been in business for nearly 20 years, never needing a loan to stay open—until the impact of COVID-19. He thanked the community, United Way, the City and FFE for the vital support.
“The loan will allow me to keep my doors open,” he said. “I look forward to continuing to serve this great community.”
To participate in the KSBLF, eligible businesses must be impacted by Executive Order 2020-21, be located in the City of Kalamazoo, have 50 full-time equivalent employees or fewer, and revenues of $2.5 million or less, must provide support to impacted employee(s), and must be able to demonstrate an income loss due to the COVID-19 outbreak. An advisory committee of representatives from UWBCKR, City of Kalamazoo/Foundation For Excellence, banking, and economic and community development sectors reviews applications and make decisions on funding.
To learn more about the Kalamazoo Small Business Loan Fund and how to apply, including a dashboard on loans to date, click here.
