Revolving loan fund can help regional small businesses

By: 
Erik Cliburn

Small businesses in Audrain County, along with the seven other counties in the Mark Twain Regional Council of Governments’ coverage area, will soon be able to apply for revolving loan funds awarded by the U.S. Department of Commerce's Economic Development Administration.

The council is a regional planning commission that serves Audrain, Macon, Marion, Monroe, Pike, Ralls, Randolph and Shelby counties. It received $550,000 in coronavirus relief bill funding to administer a revolving loan fund to small businesses impacted by COVID-19. Council officials did not respond to emails seeking comment.

Though the total loan amount over eight counties is relatively low, there should be enough funds for a measurable impact on small businesses in the area, Moberly Area Economic Development Corporation President Michael Bugalski said. Many approved loans are less than $20,000, he said.

“Obviously, everybody always wants more,” he said. “It’s like asking for a raise at work, everyone always wants more money. But I think that [$550,000] could actually have a positive impact. We’re going through a national situation here that’s certainly very difficult. In an ideal world, there might be more, but that is a very significant amount of money and it should be a great help.”

Mark Twain already has been administering a revolving loan fund program, which is primarily designed to provide gap funding for new or expanding businesses seeking financing from a private lender. Overall, the council’s program and revolving loan fund programs have been beneficial to small businesses in the region, Bugalski said.

“Revolving loan funds are a very helpful tool, because they have, traditionally, filled a gap for people,” Bugalski said. “There are a lot of people who want to get financing, but they don’t have enough money for the down payment. [RLFs] have, sort of, filled that gap, been able to get them some funds or have an added layer of security to the overall loan.”

Overall, Missouri received approximately $4.8 million in relief bill funds to put toward revolving loan funds to help small businesses in the state.

The St. Louis Development Corporation received $3.2 million of those funds, MTRCOG and the Mo-Kan Regional Council, which serves Andrew, Buchanan, Clinton and DeKalb counties, received $550,000, and the South Central Ozarks Council of Governments, which serves Douglas, Howell, Ozark , Shannon, Texas and Wright counties, received $530,000.

Right now the overall health of business community in Randolph County is fair, but some smaller businesses could soon feel more pressure as larger industries and manufacturers deal with supply problems caused by the pandemic and subsequent shutdowns, Bugalski said.

“Overall, I think most people are holding steady,” he said. “There are a lot of industries having supply problems at the moment, which is starting to affect the smaller businesses. Although, it’s been affecting some of them for a while now. If it doesn’t improve, it is going to have an impact.”

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