Newport News Revolving Loan Funds Temporary Flexibilities
The City, through the Department of Development, offers several loan programs funded through federal sources such as the US Department of Housing and Urban Development and the United States Economic Development Administration (US EDA). In 2020, the US EDA provided the City with special CARES Act funds to assist businesses overcoming the negative effects of the coronavirus pandemic (COVID-19). These funds had certain flexibilities available.
In light of the COVID-19 impact on small businesses, the increasing demand for relief and the need for loan fund operators with resources to provide credit quickly and efficiently to their communities, older existing revolving loan funds operated by the City have been allowed the same flexibilities as the CARES Act fund for a temporary period of time. These flexibilities have a “sunset date” of 06/30/2022 (the flexibility period). The flexibilities relate to waiving the minimum interest rate, the requirement to leverage private capital and the requirement to evidence that credit is not otherwise available.
To assist small businesses during the COVID-19 pandemic, various Newport News revolving loan fund programs have been temporarily amended with guidelines allowing for the flexibilities mentioned above. These flexibilities are being made available to Newport News businesses during the flexibility period.
Allowable Lending Activities, which may be undertaken with the loan shall include:
- Acquisition of machinery and equipment
- Building rehabilitation costs
- Certain refinancing of existing loans
- Facility remediation and cleanup costs
- Gap financing
- Infrastructure costs
- Other costs contributing to the value of a project's fixed assets, such as sales and use taxes, and interest on interim construction financing
- Working capital, including inventory
Loan Type Exclusion - No adult entertainment businesses or real estate purchases.
Application Fee - Shall be waived.
Interest Rates - The interest rate on loans will generally be recommended by staff and approved as deemed appropriate by the applicable loan fund approval Board. Fixed rates for the flexibility period, ending June 30, 2022, will generally be between 0% and 2%.
Term - The maximum loan term shall generally be ten (10) years, with shorter terms for loans where the majority of funds are used for working capital
The various Loan Program Guidelines will be further relaxed as follows through June 30, 2022 as it relates to the loan funding during the flexibility period:
- Applicants need not demonstrate that credit is not otherwise available.
- The responsible Board, at its discretion, may defer payment of principal and interest for a period not to exceed twelve (12) months; schedule repayments with longer term amortizations and balloon payments at the end of the loan term; or subordinate the loan to other financing;
- The Private Sector Leverage requirement is waived during the flexibility period;
- 100% of loan request can be used for working capital;
All other terms and conditions included in the existing program Guidelines and Administrative Plan for each program will be applicable.
How to Apply
If your business is located in Newport News, applications may be submitted using the online application portal.
You will need these documents available in electronic format to upload when completing the application, Required Documentation.
If you have any questions regarding the guidelines, application process or need assistance completing the application, contact Priscilla Green with the Department of Development at (757) 509-2587 or email@example.com.