Businesses up and down King Street have been forced to shut their doors as social distancing measures are enacted
City Council deferred a proposal on Thursday that would have used funds from the Local Development Corporation to help businesses affected by the COVID-19 outbreak.
The proposal was introduced to City Council on Tuesday, but it was apparent from discussion that the idea was proposed among some members before that. The plan would pull $4 million from the LDC to be loaned to small businesses in the Charleston area. The loans, up to $25,000 each, were proposed to help sustain businesses until separate Small Business Administration loan funds started flowing.
The money would come from an LDC fund, part of a settlement between the LDC and the city in a dispute over funds initially used to help build the Charleston Place hotel downtown. Normally, the LDC provides loans to tricounty businesses.
On Tuesday, some members took issue with the fact that the emergency loans were unsecured, meaning that if borrowers defaulted, no collateral would be available to recoup losses.
Despite specific concerns, councilmembers were initially receptive to the proposal to help local businesses, calling for Thursday's special meeting to debate the idea quickly. But upon the deferral Thursday, no date was provided for council to discuss it further.
Local businesses, including those in the tourism and restaurant industry, have been turned on their heads as shutdowns roll across the city. The COVID-19 outbreak has forced many people indoors and created an uncertain economy, along with sudden layoffs and shuttered businesses.
At the special Community Development Committee meeting on Thursday, members signaled that more research was needed before moving ahead with the proposal. Mayor John Tecklenburg said the city can start "digging down" into hospitality funds already available.
Councilmember Keith Waring suggested thinking outside of the box, helping small businesses apply for an SBA loan, and bringing representatives from the Charleston Visitors' Bureau in to help.
"Those businesses need to know that those resources are there, whether it's through the city, the LDC, or any other creative mechanism," he said.
Councilman Jason Sakran, one of the proposal's main supporters, did not vote. At Tuesday's meeting, Sakran said he would recuse himself from the matter as a local business owner with a loan from LDC.
Lowcountry Local First was among the community groups pushing for the funds to be made available in short order.
On the national level, an eagerly anticipated economic stimulus package is expected to be signed into law this week, potentially floating some relief in the coming weeks, but many local businesses have already being impacted.
Citing a "fluid" situation nationally, Tecklenburg urged members to see how congressional leaders decide to craft their economic relief.
The Small Business Administration is taking applications from S.C. businesses for disaster loans up to $2 million for nonprofits and certain other enterprises.