The Birmingham City Council on Wednesday approved spending $1 million from its General Fund on a small business loan program designed to help small businesses struggling with the impact of COVID-19.
The money is in addition to $200,000 put in the program fund Tuesday from the city’s innovation and economic opportunity fund.
The Bham Strong program will provide eligible small businesses with up to $25,000 in interest-free, 180-day loans. Josh Carpenter, the city’s director of innovation and economic opportunity, said the loan would “stabilize small businesses that are struggling (and) bridge small businesses into either a more stable economic cycle or other sources of capital such as (Small Business Administration assistance).”
Carpenter and Mayor Randall Woodfin told councilors last week that they anticipated being able to raise matching funds from the private sector to bring the loan fund total to $2.4 million. On Tuesday, they said they were on their way to reaching that goal.
“We have $900,000 already committed to match the city’s $1.2 million, and we have several other outstanding asks that we expect will result in more funding,” Carpenter said.
All the councilors voted for the measure except District 8 Councilor Steven Hoyt, who abstained. He said he had not been included in drafting the ordinance and that he felt nonprofits should be eligible for the loans.
Revenue-generating Birmingham businesses with fewer than 50 employees will be eligible for the loan. Woodfin said he was not considering a tax abatement for those businesses because that would “pretty much offset what we’re trying to do” with the loan program.
“In a very capitalistic way, we need to be cognizant about our revenues,” added District 2 Councilor Hunter Williams.