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Decatur City Commission moves forward with loan program for businesses affected by COVID-19

Business COVID-19 Decatur

Decatur City Commission moves forward with loan program for businesses affected by COVID-19

E. Ponce De Leon Avenue in Downtown Decatur. Photo by Dean Hesse
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Decatur, GA – At its regular meeting on April 6, the Decatur City Commission approved a framework for a loan program to help businesses affected by the COVID-19 pandemic.

While many of the details need to be worked out, the general idea is the city would create a $500,000 business loan fund. Businesses could receive up to $25,000, with the average loan in the $10,000 to $15,000 range. The loans would have a low interest or be interest-free. The payback period would be 36 to 60 months. The loans would be limited to businesses with 25 or fewer full-time employees.

Deputy City Manager Hugh Saxon explained the idea to the City Commission, which held a virtual meeting streamed via the city’s website.

The city would contribute $400,000 and the other $100,000 could come from the Decatur Development Authority and funds raised through the Decatur Legacy Project nonprofit organization.

“We’re developing criteria and identifying a financial services partner to provide technical support,” Saxon said. “The city of Decatur is probably not the best organization to get in the loan business. There’s technical expertise we haven’t developed over the years. We’ve had support and encouragement from the Georgia Cities Foundation who think this could be a possible model used in other cities throughout the state.”

Saxon said as part of the process for determining who gets a loan, the city may consider an applicant’s credit score and whether they were current on their licenses and fees in 2019. The city is considering waiting six months to a year before asking businesses to start repaying the loans.

Saxon anticipated that he would bring more details about the program to discuss at the next City Commission meeting.

“I’ve told people my experience with loaning money is to my kids,” Saxon said. “There are professionals who do this for a living, who can set up a framework to get resources to our business community and provide assistance during this crisis. We’ve invested a lot of resources in downtown and Oakhurst and east Decatur and it would be a terrible shame if we were not able to extend some assistance to these critical community resources.”

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Saxon said he’s also been in discussions with landlords and said many of them recognize that their tenants might be delayed in making rent payments. Mayor Pro Tem Tony Powers said people want to contribute to the fund could do so through the Legacy Project and receive a tax write-off.

As a caution, Saxon noted that the loan program will be “more risky” than the city’s other projects.

“The environment is such that there is some chance that some of it will not be paid back,” Saxon said. “I just want everybody to be aware that’s a possible cost we’ll have to deal with at some point.”

Commissioner George Dusenbury said the risk is worth it.

“I’m willing to accept that risk and I appreciate you pointing that out for us, Hugh,” he said. “There’ll probably be a recession following this, I am happy we are taking this step.”

Mayor Patti Garrett agreed.

“Our local businesses are really the heart and soul of our community, along with our residents,” Garrett said. “This is a good first step we are confident we can take now, and there are a lot of local residents who will want to support businesses in this way as well.”

Saxon said he hopes to have the program up and running in 45 to 60 days.

In other business, City Manager Andrea Arnold noted that Gov. Brian Kemp’s shelter-in-place order in response to COVID-19 takes the place of local orders passed by cities, including Decatur’s.

“In general, the governor’s order is broader than what was in place,” Arnold said. “We do recognize there’s value in having this uniformity applied across the entire state. There are a number of important similarities in the governor’s order and what the mayor issued.”

Under the governor’s order, residents are required to remain in their homes as much as possible unless they are using “essential services.” Restaurants can only be open for takeout and delivery orders. For more information about the order, click here.

“The city is not in a position to answer questions about whether or not your business qualifies as being part of critical infrastructure,” Arnold said. “If a business needs guidance, they need to contact the state Department of Economic Development.”

Arnold said she’s been “really proud” of how Decatur residents have adapted to the situation. She noted that the city also has waived rents for the next two months nonprofits leasing space at the Legacy Park property.

“I encourage property owners able to do so to consider doing the same, whether that’s residential or also any of our commercial property owners,” Arnold said.

Arnold and city commissioners also thanked the city’s first responders and sanitation workers who are “keeping the city moving,” as Mayor Pro Tem Powers put it.

Commissioner Kelly Walsh said she wished the commissioners could be in a room together. Walsh provided entertainment during the meeting when she stopped to swat at a yellow jacket that had landed on her computer screen.

“First of all, I really miss everybody,” Walsh said. “These are extraordinary times. Our mayor and city manager and staff have responded in a fashion we appreciate … I can say with confidence when residents or neighbors call me, you have the best resources at hand.”

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