By Brett Yates
Last spring, when the Rutland Redevelopment Agency (RRA) established a temporary lending policy to assist mom-and-pop businesses devastated by the pandemic, city officials hoped that, within a year, business would be back to normal. But now, it seems Rutland City’s entrepreneurs may need some extra help.
“We’re finding that a number of businesses are still in a tenuous spot,” RRA Executive Director Brennan Duffy reported at the Board of Aldermen’s last meeting. He cited the impact of state-mandated public health protocols that “have continued over the year.”
In 2020, the RRA expanded its Business Incentive and Assistance Program (BIAP) — which normally uses tax revenue from the city’s private solar arrays for loans and grants to stimulate the creation of new businesses — to provide a cash infusion to hard-hit existing enterprises with fewer than 10 employees. Before funds ran out, the new Micro Business Emergency Loan program disbursed $140,000, mostly in the form of one-year loans of $5,000 with zero interest and a balloon payment at maturity.
Duffy now worries that, with the first loans about to come due, small businesses won’t be able to find $5,000 to cover the obligation. New payment options, however, will offer some flexibility.
Under the revised terms of the loan agreement, business owners can break up the balloon payment into chunks of $1,000 each over a five-month period following the loan’s original due date. Alternatively, they can defer the balloon payment by one year at a cost of 3% interest for the second year of the loan.
A handful of owners took out $10,000 two-year loans from the emergency program, and these came with 3% annual interest rates from the start. For borrowers who would benefit, City Treasurer Mary Markowski will devise penalty-free custom prepayment schedules.
The Board of Aldermen approved the changes on April 5. They also suggested their openness to future adjustments.
“We’re going to see a lot of this,” Alderman Sam Gorruso predicted. “I was kind of expecting it when we did this. It’s not straightening out – there’s still a lot of hurt out there. We’ve got to be lenient and helpful, and I think this is a great first step, and if we have to make another step, we’ll do that.”
Alderwoman Sharon Davis emphasized the significance of the loans for local business owners who last year, “had sought some assistance and were so grateful. And we were grateful because those businesses were able to continue in the city of Rutland. So I’ve really seen what the BIAP money has done for these businesses and continues to do.”