CHICAGO — Mayor Lori E. Lightfoot, in a speech Thursday evening, announced the launch of a new $ 100 million economic assistance program to support small businesses in Chicago that experience a temporary loss of revenue due to of the COVID-19 epidemic.
The mayor said the city is launching the new Chicago Small Business Resiliency Loan Fund in partnership with the Catalyst Fund, chaired by Treasurer Melissa Conyears-Ervin, and other private sponsors. The new fund will provide more than $ 100 million in low-interest loans to severely affected small businesses over the coming months, targeting historically underfunded communities with a focus on minimizing hardship for these businesses and their employees.
The Mayor’s Economic Assistance Program is designed to provide cash relief to neighborhood entrepreneurs over the coming weeks and months, and includes extended due dates for business-related tax payments until the 30th. April 2020.
“Chicago’s small businesses are at the heart of our economy and essential to the life of our neighborhoods,” said Mayor Lightfoot. “We know it’s not business as usual and we don’t have the luxury of waiting for federal support, which is why with these initial investments, we are ensuring that business owners and entrepreneurs locals have the resources they need to survive. ”
According to a recent study, the average Chicago small business only has 28 days of cash, and in many areas of southern and western Chicago, cash flow is even tighter. In Englewood, for example, half of small business owners have only enough money to operate for five days or less, city officials note.
Through innovative public-private partnerships, the new $ 100 million emergency fund builds on a $ 25 million grant from the City of Chicago, $ 50 million in capital from the Chicago Community Catalyst Fund as well as $ 10 million from Goldman Sachs’ Urban Investment Group, $ 1 million from Fifth Third, $ 250,000 from Clayco and $ 15 million from additional private funding sources. With additional philanthropic funds, the city is working to expand the reach of this economic aid program.
The new emergency fund will lend up to $ 50,000 in working capital loans to neighborhood entrepreneurs suffering significant economic hardship to help support rent and payroll expenses. The city will work with a network of community development financial institutions, which will be responsible for providing support for application selection, credit underwriting, loan disbursements and service.
Eligible businesses must have experienced a drop in revenue of more than 25% due to the impact of COVID-19. In addition, to be considered a small business, each establishment must have fewer than 50 employees. Starting March 31, the city’s CDFI partners will begin accepting loan applications from local businesses. In the meantime, business owners and entrepreneurs are encouraged to complete an interest form and a municipal representative from the fund will communicate on next steps.
The city said on Wednesday it was temporarily suspending debt collection and limiting ticketing and towing practices. The new economic relief program will temporarily postpone all trade fines as well as license renewals and late fees for Chicago businesses until April 30, 2020. The city will also temporarily suspend trade sanctions unrelated to public safety until April 30.
Chicago is also extending the tax payment due dates until April 30, 2020 for the following tourist taxes: bottled water tax, checkout bag tax, entertainment tax, lodging tax at the hotel, restaurant tax and parking tax.