A North Platte banker and city councilman painted a grim picture Wednesday morning of steep economic losses and permanently lost jobs if small businesses can’t get help to weather COVID-19 slowdowns.
Draining the city’s $2.175 million Quality Growth Fund wouldn’t come close to saving them, Councilman Ty Lucas said before the fund’s Citizens Review Committee voted to tap it for $250,000 to help local businesses seek emergency federal loans.
Lucas said Small Business Administration “economic injury disaster loans,” likely to swell to $367 billion nationally under a pending bill in Congress, likely offers them their best chance to survive.
He estimated $50 million to $100 million in Lincoln County alone could be lost as people limit purchases and personal contacts to slow the spread of the novel coronavirus.
“I think the majority (of businesses) are having tremendous issues, (and) we don’t have nearly enough money to help” them all, Lucas said before the QGF panel voted 5-0 to back the $250,000 request.
The proposal, which the City Council likely will take up next week, would reimburse up to $2,500 that a business spends on direct costs to navigate the byzantine SBA loan process.
Businesses within North Platte’s city limits or inside the city’s two-mile zoning jurisdiction beyond the limits could apply for reimbursements, the advisory committee recommended.
All five QGF committee members were present — three in person and two electronically — at the North Platte Area Chamber & Development Corp. meeting site.
An executive order last week by Gov. Pete Ricketts waived part of the state Open Meetings Act so public bodies can meet and offer public access electronically.
Lucas outlined the $250,000 QGF request not as a councilman but as a NebraskaLand National Bank executive vice president and a member of the chamber’s economic development committee.
He offered two scenarios of COVID-19’s economic impact based on the chamber’s current membership of about 575. Some members aren’t businesses, and some businesses aren’t members, Lucas noted.
If half the chamber’s members should average $100,000 in economic damages, that alone would total $28.75 million, he said. If three-fourths averaged $50,000 in losses, that adds up to $22 million.
Lucas talked about an unnamed local business, with three to five employees and “a food service aspect” to its offerings, that normally could expect to clear $20,000 this year.
His committee estimated lost business from coronavirus would turn that $20,000 profit into $50,000 in net operational losses without outside financial help.
“In this case, that (loss) would be enough to put this particular business out of business for good,” with its landlord and local suppliers also suffering, Lucas said.
Local food service, hospitality and travel businesses already have been laying off employees, he said, as have beauty salons and fitness gyms.
He said those are the types of businesses most in need of help that the SBA’s loan program could provide, along with other businesses likely to lose 30% to 70% of their income to COVID-19.
If the City Council approves the $250,000 QGF allocation, Lucas said, the chamber will put together a list of bankers, accountants, lawyers and others willing to help with SBA applications. A few already have volunteered, he said.
QGF committee member Pat Keenan relayed support for the request from Kert McKeone, a Western Nebraska Bank executive vice president with extensive experience in SBA loans.
McKeone told him “for a small-business person to take this (process) on themselves is so overwhelming, and unless you know the ropes ... it would be easier to walk away and give up,” Keenan said.
“We need to do this, and we need to do it ASAP.”
The motion forwarding the chamber’s QGF request to the City Council would give businesses applying for SBA loans until Dec. 31 to submit their application expenses for reimbursement.
Committee members agreed that applying businesses still could be reimbursed if they apply in good faith for an SBA loan but are turned down.
If demand for assistance exhausts the initial $250,000, they said, the chamber could apply for more from the QGF pool of dedicated city sales tax funds.
“If this program is hopping and helping, we’re open to continuing it,” said committee member and former Mayor Bob Phares.
Lucas said the chamber learned from its experience with its Shot in the Arm housing construction programs “how powerful it is to just tell the community, ‘We’re here and we want to help you.’
“In this case, we want (small businesses) to survive and take advantage of this economic assistance to survive.”
Mayor Dwight Livingston, one of 24 participants in the QGF meeting conference call, said April 1 is the most likely date for a special City Council meeting on the $250,000 QGF request.
The exact date depends on working out the final kinks in enabling videoconference participation by some council members and the public, Livingston said.