Disbursed $713,400 in funds out of the $6 million available
As of this morning the City of Austin had made 22 Economic Injury Bridge Loans totaling $713,400. That’s used about 12 percent of the $6 million in Section 108 funds approved by the U.S. Department of Housing and Urban Development (HUD) for this purpose.
The City’s Economic Development Department has published a three-page online dashboard that indicates 155 jobs have been retained by the approved loans, along with numerous other metrics associated with the bridge loan program.
David Gray, public information and marketing manager for the Economic Development Department, said, “The dashboard refreshes each morning, displaying the prior day’s total.”
Companies getting loans so far
What the dashboard does not do is provide a list of actual loan recipients. The Austin Bulldog requested a list and Gray provided it.
Eighteen of the 22 loans made to date were for the maximum $35,000. The smallest loan of $11,000 went to Somaspace, a Pilates studio. Every loan was granted at the amount requested.
We used the PDF provided by Gray to produce a graphic to show how much money so far has been lent to businesses within each council district. It shows that:
Kathie Tovo’s District 9 businesses got the most loans and the most money: five loans totaling $151,000.
Ann Kitchen’s District 5 businesses netted four loans totaling $140,000.
Sabino “Pio” Renteria’s District 3 businesses also got four loans for a total of $135,000.
Paige Ellis’s District 8 is notable for being the only one to have no business loan recipients.
Districts 6, 7, and 10 each had two businesses getting bridge loans.
Districts 1, 2 and 4 each had but one business getting a loan.
You can see a City of Austin map showing the boundaries of each council district.
Bridge loan program started slow
The City requested HUD’s permission to use existing Section 108 funds for bridge loans via a letter dated March 31. HUD approved use of these funds April 8.
The City program, which was launched April 22, makes loans of up to $35,000 to help small businesses survive the economic disaster resulting from the COVID-19 virus and government orders to shut down or reduce business operations.
To be qualified for a City bridge loan, applicants must have already applied for an Economic Disaster Injury Loan from the U.S. Small Business Administration (SBA). To get a bridge loan applicants must be creditworthy and show ability to repay the loan. Bridge loans are to be paid off with SBA loan proceeds or within one year, whichever comes first.
Though of somewhat limited appeal the City’s Bridge Loan Program has been popular enough to draw 1,137 inquiries, in essence a request for the application materials. The City has sent 760 applications to requestors and had gotten back 145 of those by last Friday, about 19 percent.
Eighty-five applications have been sent to underwriting, where they are examined for cash flow and ability to repay the loan. So far underwriting has recommended approval of 24 loan applications and recommend not approving 18. All 42 of those had gone to the City’s Loan Committee and 22 have been funded, with checks mailed to loan recipients.
This story was updated at 7:00pm Thursday June 4, 2020 to change the headline, after finding out that the city has not actually cut a check for any loans yet.
Links to related material:
City of Austin’s list of Economic Injury Bridge Loans made, May 15, 2020 (1 page)
Ken Martin has been covering local government and politics since 1981. In his last dozen years in a Marine Corps career Ken was a financial accounting officer. See more on Ken on the About page.
Email [email protected]
Related Bulldog coverage:
City bridge loan program off to a slow start, April 27, 2020
Small businesses can apply for city’s bridge loans Monday, April 9, 2020
COVID-19 disaster help coming for small businesses, March 26, 2020