In a special-called meeting held via video conference last week, the Auburn City Council unanimously approved a resolution that will allow the city to absorb the interest costs for capital loans given by local banks to small businesses affected by the Covid-19 pandemic.
The Working Capital Loan Interest Program allocates up to $500,000 for the effort, allowing the city to pay the cost of interest on capital loans of up to $25,000 made to local businesses by local banks.
"We know that federal aid is coming to help support our struggling businesses, but we felt like we needed to do something to help now," said Auburn Mayor Ron Anders. "We truly hope that through this program our local businesses will find the support and relief they need in these hard times."
The program gives the city, in partnership with the Auburn Chamber of Commerce and seven lending institutions, the potential to infuse up to $4 million of working capital into Auburn's small businesses, according to a news release from the city. The participating lending institutions include AuburnBank, BancorpSouth, BBVA, MAX Credit Union, Regions, River Bank & Trust, and Southern States Bank.
City Manager Jim Buston said that banks will ultimately determine what qualifies as a small business. "To be as broad as possible, our only direction to the banks themselves was that it had to be a business within the corporate limits of Auburn," said Buston. "All we are doing is guaranteeing the interest on that loan."
The program will not disqualify a business from SBA disaster loans, added Buston.
Find details on the program at auburnalabama.org/coronavirus/business-resources/interest-subsidy. The city has compiled a list of resources for businesses at www.auburnalabama.org/coronavirus/business-resources/.