GREENFIELD — The Franklin County Community Development Corp. is receiving $803,000 to help small businesses across the county and in Athol rebound from the impact of the pandemic.
The money will come from a revolving loan fund established under the federal Coronavirus Aid, Relief and Economic Security (CARES) Act Recovery Assistance program, which was signed into law in March. In all, $17.8 million from the program will be distributed throughout Massachusetts by the Economic Development Administration (EDA), according to a press release from the U.S. Department of Commerce.
Executive Director John Waite explained that about 25 years ago the Franklin County Community Development Corp. received $800,000 from the U.S. Economic Development Administration (EDA) to establish a revolving loan fund to assist small businesses in the county’s 26 communities, as well as in Athol, Petersham, Phillipston and Royalston.
“We have revolved that $800,000; it’s all for small businesses,” Waite explained. “We lend it out to small businesses — they pay it back. We lend it out again — they pay us back. We lend it out again. We’ve done a really good job of revolving that loan fund over the years.
“When this COVID situation came up, EDA wanted to do something. So, they set up a program where organizations that already had some of their funds and were doing a good job, they would make more funding available to them because they know small businesses need funding right now.”
When applying for funding under the program about two months ago, the Franklin County Community Development Corp. was told the maximum any organization would receive would be $730,000, plus $73,000 to cover staff costs.
“They approved it, so they’re going to start dealing that out to us now that they’ve announced it,” Waite said.
This latest influx of cash will serve to expand the existing loan program. All the money from the existing loan fund, he said, has already been loaned out.
“Since COVID-19 started,” he continued, “we’ve been deferring payments. A lot of our businesses are having problems, obviously. So, right away we deferred payments for people who wanted to do so. We lowered the interest rate for some of our folks, and suspended interest payments for some others.
“We do it on a one-on-one basis. We talk to the business owner, find out what their issues are and try to work with them. Many of our businesses, we’re happy to say, are still making full payments because their business hasn’t been interrupted very much.”
The Franklin County Community Development Corp., Waite explained, follows an Economic Development Administration work plan for distributing the money.
“Up to $200,000 is our maximum loan size for any one business,” he said. “We have other loan funds, too. We have about $5.5 million that we’re lending out to small businesses in Western Massachusetts. Our average loan size is about $70,000.”
When ask for what purposes the loans may be used, Waite responded, “Anything that’s legal.”
“But because it’s federal, we’re not allowed to lend to marijuana businesses because that’s a state thing,” he added. “It has to be federally legal.”
Unlike the Paycheck Protection Program, which was also part of the CARES Act, money from the revolving loan fund can be used for any number of purposes.
“People right now are looking for working capital,” Waite said. “They need to buy inventory, if they’re going to kind of restart their business. Some people are looking for equipment to become more efficient. Really, we’re just always working with people to try to increase their revenue a little bit or decrease their expenses.”
Waite added that businesses are monitored to ensure loans are being spent for the purposes listed on their application.
“The main thing (the Economic Development Administration wants) to see is that people are creating jobs,” Waite said. “So, if we give a loan for $100,000, hopefully that business can create maybe two jobs or something.
“Right now, during this pandemic, I think it’s more about business survival,” he continued. “If people can increase their business and hire some people, that’s terrific. But the main thing is we just want to help businesses get through this challenging time.”
Waite explained that Athol, Petersham, Phillipston and Royalston are included in the Franklin County Community Development Corp.’s service area because they are included in what’s known as North Quabbin.
“It’s an area of nine towns, five of which are on the Franklin County side, and four that are on the Worcester County side,” he said. “But because we look more at the business area, Athol and Orange do belong together. So, when the CDC started, its area was determined to be Franklin County and North Quabbin. Some years we do more business in Athol, some years we do less.”
Waite said there are plans to meet this week with officials from Athol and the North Quabbin Chamber of Commerce to discuss this latest development.
While Athol was specifically mentioned in the press release, Waite said he’s unsure if businesses in Petersham, Phillipston and Royalston will be able to take advantage of the funding.
Greg Vine can be reached at gvineadn@gmail.com.