City Council reallocates funds to loan program for small businesses


Daily File Photo by Colin Boyle

Ald. Robin Rue Simmons (5th). On Monday, City Council voted to reallocate city funds to allow for loans to support local businesses struggling because of COVID-19.

Jacob Fulton, Assistant City Editor

City Council unanimously voted to redirect funds from its Workforce Development Fund to a small business emergency loan program during its virtual Monday meeting.

The loan program was proposed by Lending for Evanston and Northwestern Development, an organization run by Northwestern University students that works to further the economic growth of the city. LEND supports and consults with small businesses, with a focus on supporting minorities and women as business owners.

The resolution redistributes $100,000 of the city’s budgeted funds for workforce development into micro-loans to local businesses. The micro-loans, which will be facilitated by LEND, aim to bridge the gap caused by coronavirus-related financial instability.

Council members pushed for action on the item instead of delaying a vote to the council’s April 27 meeting. The city’s economic development manager, Paul Zalmezak, said the decision is especially urgent because that money can serve as a bridge while businesses wait to receive federal funding, which has not yet been distributed.

“I don’t think there’s a better use for the economic development funds right now, as we wait for the federal loan programs to fund (the city’s local businesses),” Zalmezak said. “The money has not flowed and we really think that we can help, especially some of the more low moderate income businesses that we serve in our community.”

Typically, the workplace development fund is intended to financially support small businesses in the job training and placement process on an application-centered basis. No businesses have applied for support from the fund yet this year, which prompted the discussion about redistribution. LEND plans to allocate loans of $5,000 to up to 20 local businesses, and will offer pro bono consulting services from both current members and alumni of the program.

Ald. Robin Rue Simmons (5th) said the emergency loan program is essential to supporting various businesses across the city, and is more inclusive than some federal policies.

“There are plenty of opportunities, grants and loans out there,” Rue Simmons said. “From everyone that I’ve checked in with, no one has been funded or awarded yet at this point. And then many of our smaller businesses, gig workers and micro-businesses are not going to meet the threshold to qualify for these (federal) programs.”

While the city funds will serve as a starting point for the program, LEND is currently raising outside money and plans to expand the program beyond the initial $100,000, according to a city memorandum.

Ald. Cicely Fleming (9th) said she hopes to see the loan program aid local businesses most affected by the economic crisis.

“I would love to see a little bit more focus on those businesses that either aren’t going to qualify for as much federal funding, don’t have the technology or the skill to do that, or really are going to take a much longer time to get back on their feet,” Fleming said.

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