‘Literally devastated’: Mecklenburg will launch small business relief amid COVID-19

Small Mecklenburg businesses that have been battered by the coronavirus pandemic will soon get some help in the form of low-interest loans from the county.

Mecklenburg County commissioners approved two critical emergency loan programs Tuesday night for small businesses and micro-businesses, or companies with five employees or less.

A $5 million relief package for small businesses will provide low-interest loans of $5,000 to $35,000 to use for rent, payroll, utilities and other immediate expenses. A separate relief effort will help some of Mecklenburg County’s smallest businesses receive loans of up to $10,000.

”This is a bridge to allow businesses to survive,” Peter Zeiler, Mecklenburg’s economic development director, told the county commissioners. “This is not designed to be a long-term solution. It is a stabilization fund to keep those businesses operating until broader loans can be made available.”

County Manager Dena Diorio said Mecklenburg can be “nimble” in helping residents who are waiting months to get a loan from the Small Business Administration, among other state and federal agencies, despite facing looming financial collapse.

In the local program for small businesses, defined as those with up to 50 full-time employees, applicants must prove they were profitable for at least two years but cannot cover current expenses amid COVID-19 restrictions.

The program calls for using $6 million from Mecklenburg County’s general fund — with $5 million allocated for the actual loans and $1 million for administrative costs.

County commissioners met remotely by phone Tuesday in order to follow social distancing guidelines.

The approval for the loan program — in an 8-1 vote — came after more than an hour of contentious debate.

Small businesses forced to close

Commissioner Susan Harden was vocal in her support of the relief package, emphasizing small businesses have been forced to shutter under Mecklenburg’s stay-at-home order.

“The small business community is literally devastated,” Harden said. “We need to provide the bridge (and) support to get through this crisis.”

But some county commissioners criticized the scope of the loans, questioning if the funds would successfully alleviate economic blows dealt to small business owners during the pandemic. Only 142 loans could be distributed if all Mecklenburg businesses were awarded the maximum loan amount, Zeiler said.

“It’s not even big enough to be called a Band-Aid — it’s so tiny,” said Commissioner Susan Rodriguez-McDowell, urging the county to explore additional ways to support businesses.

Some county commissioners questioned whether the program’s requirements — such as submitting specific financial documents — created too many barriers, particularly for minority-owned businesses. Commissioner Trevor Fuller described the fund as a “giveaway” with lax restrictions, saying businesses in surrounding North and South Carolina counties may be potentially eligible to participate, not just those in Mecklenburg.

County Commissioner Pat Cotham cast the sole vote against the program.

“I just worry they’re going to be left behind,” Cotham said of various businesses, such as salons and caterers. “I worry about not getting enough help with this money.”

Aid for micro-businesses

Mecklenburg County commissioners swiftly approved an economic relief package for micro-businesses. Loans would be “fully forgivable” as long as they are used for payroll costs, interests on mortgages, rent and utilities, according to county documents.

Applications will open on April 13, and loans are available on a first-come, first-serve basis. Eligible businesses must show the owner or the majority of employees earn 80% or less of the area median income — and that their revenues dropped by at least 25% due to the coronavirus outbreak.

Charlotte and Mint Hill are not eligible to participate, based on limitations for how federal community development grant money can be disbursed.

That could create a gap in resources for micro-businesses within Charlotte’s “opportunity corridors” — including Beatties Ford Road and the Eastland area — where leaders hope to spur economic growth among marginalized communities, according to City Manager Marcus Jones.

Many City Council members rallied for urgent action to keep those businesses afloat during their first virtual meeting Monday. It is unclear how a specific program could be structured, though, as Charlotte waits to receive money from the federal stimulus package.

The city may also explore using tourism revenues — generated through taxes on hotel, rental cars, and prepared food and beverages — to help the local hospitality sector, Mayor Vi Lyles said Tuesday in a virtual press briefing.

This story was originally published April 7, 2020 at 11:46 PM.