Bloomington businesses impacted by COVID-19 could start to tap over $2M in local bridge loans by end of next week

3-Weeks Annotated Monroe Unemployment

On Thursday, the city of Bloomington officially launched a loan program for businesses and non-profits inside the city limits that have been impacted by the COVID-19 pandemic.

The application for Rapid Response Fund loans went live around 2 p.m.

A bit after 1 p.m. on Friday, under 24 hours after the form was launched, five completed applications had been received for the loans, which have a limit of $50,000 per business. Another five dozen or so applications were in the works, according the Bloomington’s director of public engagement, Mary Catherine Carmichael.

Alex Crowley, Bloomington’s director of economic and sustainable development, said on Thursday the volume of applications could affect how fast they could be processed. Crowley said the city would proceeding “very aggressively to make the turnaround time as short as possible.” Crowley hopes businesses could have money in hand by the end of next week (April 17).

The loans are meant to provide a bridge between now and the point when local businesses can start receiving the more substantial benefits that are available through federal  supports that have been enacted to help pandemic-impacted businesses.

The loan program is being started as some local businesses have shuttered, at least for the time being, and others have laid off all their workers. Pandemic-related orders by Indiana governor Eric Holcomb have included one for Indiana residents to stay at home except to conduct essential business, and another that bans all but take-out and delivery services for restaurants.

Bloomington’s loan program was launched the same day when Indiana’s department of workforce development released the latest weekly figures on initial unemployment claims.

For Monroe County, the week ending April 3 saw 1,457 initial claims. That was a slight decline from the 1,627 initial claims that were filed the week before, but still 50 percent higher than the previous week’s 934 claims.

In Monroe County, the highest number of initial claims filed in any one week during the 2008–2009 economic downturn was 421. In the last three weeks, the 4,018 people who filed an initial claim for unemployment in Monroe County would be the rough numerical equivalent of every Bloomington food and beverage serving worker (2,176) and cook (1,632) filing a claim, based on statistics on low-wage workers compiled by the Brookings Institute.

On Thursday, Alex Crowley, the city’s director of economic and sustainable development, reprised the theme he’s stressed over the last couple weeks worth of procedural steps, which have been taken at public meetings: Individual workers stand to benefit from the loan program, because of the criteria that are being used to lend money to businesses. The application itself encourages businesses that apply for a loan to explain their plans for employees, Crowley said.

An economic stabilization and recovery (ESR) working group was appointed by the mayor a couple of weeks ago, to work on ways to support small businesses during the current economic crisis that’s been caused by the COVID-19 pandemic. Crowley has led the ESR working group.

On Thursday, Crowley said the ESR group wanted to get business owners to retain employees as much as they can. The goals is to save the businesses so they can re-employ their workers, Crowley said. “A business, in the end, is a bunch of people,” he said.

Sellers of prepared food and beverages, like restaurants and bard, collect the 1-percent food and beverage tax that is funding $2 million of the $2.5 million loan package. Loans aren’t restricted to just food and beverage businesses, though. The key criterion is that a business be tourism related. The tourism-related requirement can be traced to the statutorily-defined purpose for the tax, which is to pay for an expansion of the convention center and to support related tourism and economic development projects.

The procedural steps for the creative use of the food and beverage tax proceeds were approved by Bloomington’s city council and the food and beverage tax advisory commission (FABTAC) over the last two weeks. The State Board of Accounts issued some general guidance that can be analyzed as green-lighting the city’s planned use of the food and beverage tax for COVID-19-related small business relief.

The other half million dollars of city support is coming from the Bloomington Urban Enterprise Association (BUEA), which met Wednesday to approve the funds. Of that $350,000 will support loans to non-tourism businesses that are not eligible to receive support from food and beverage tax revenues.

The policy document drafted by the ESR working group describes how the yet-to-be-appointed seven-member Rapid Response Fund advisory commission should “prioritize funding for minority-owned, women-owned, and disabled-owned businesses.”

How will the ESR working group ensure that such businesses are aware of the loan program and encouraged to apply?

Responding to that question during Thursday’s press briefing, was ESR working group member Erin Predmore, who’s CEO of the Greater Bloomington Chamber of Commerce. Predmore said the chamber had established a Black business owners “affinity group” made up of about 45 to 50 people. And the city has a women- and minority-owned business enterprise list that can be targeted, Predmore said.

Crowley said the city’s department of community and family resources would help make sure information about the loan program goes out to the widest array of businesses. Making sure such businesses know about the program is one thing, but ensuring that those business are prioritized in the loan award process is the other important consideration, Crowley said. The application itself collects the data point about the ownership of a business, and the scoring matrix for loan awards includes minority ownership as a weighting factor, he said.

Towards the start of Thursday’s press briefing, Crowley ticked through the nuts and bolts of the loan program requirements. An eligible business has to have a physical address inside the city limits or be a nonprofit that resides in or serves Bloomington. The business has to have at least one employee, but no more than 250 employees.

To qualify for a loan, a business has to show there’s been a negative impact in revenue due to the COVID-19 pandemic, and has to have been open before Feb. 29. Applicants also have to be making good faith efforts to pursue other funding sources. “We don’t have local resources to maintain the whole economy,” Crowley said.

The money will be lent at a rate of 2 percent with a 3-year repayment period. Payments could be deferred for the initial six months. If the loan is repaid within a year, then no interest would be owed.

Crowley said that a small subset of the loans, for certain nonprofits, might be forgivable.

Monroe County commissioners also have a COVID-19 loan program in the works, funded with $200,000 of the county’s share of the food and beverage tax. At Friday’s press briefing, commissioner Julie Thomas encouraged businesses outside the city limits of Bloomington to apply.

Chart of Unemployment Claims

3-Weeks Annotated Monroe Unemployment

Breakdown of Bloomington low-wage workers from Brookings Institute

Age 18-64 all low-wage workers 27,200
1. Retail sales workers 9% 2,448
2. Food and beverage serving workers 8% 2,176
3. Building cleaning and pest control workers 6% 1,632
4. Cooks and food preparation workers 6% 1,632
5. Information and records clerks 5% 1,360
6. Other management occupations 4% 1,088
7. Construction trades workers 4% 1,088
8. Other personal care and service workers 4% 1,088
9. Material moving workers 3% 816
10. Supervisors of sales workers 3% 816
Age 18-24 in school no college degree 5,600
1. Food and beverage serving workers 20% 1,120
2. Retail sales workers 17% 952
3. Cooks and food preparation workers 7% 392
4. Other personal care and service workers 6% 336
5. Material moving workers 5% 280
6. Building cleaning and pest control workers 4% 224
7. Entertainment attendants and related workers 3% 168
8. Postsecondary teachers 3% 168
9. Other management occupations 3% 168
10. Other teachers and instructors 3% 168

[Data extracted from the Brookings Institute’s “A closure look at low-wage workers across the country“]