Fayetteville council to make final decision on city loans to help businesses weather coronavirus
With five children to feed, Kenzie McElvine says he has struggled financially since the state forced him to close his longtime barbershop and salon in Fayetteville in March.
As his newborn baby cried in the background during a cell phone interview, McElvine said he was excited to learn more about a city loan program to help small businesses.
He said a loan would mean anything to his family while waiting for possible state or federal help.
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“You hear it here,” he said of his baby crying in the background.
Fayetteville city council, at its 7 pm Monday meeting, is expected to give final approval to the loan program, for which the city will spend $ 250,000 from its general fund on small business loans. Homeowners can apply for loans of up to $ 5,000.
The plan calls for the city to contribute an additional $ 10,000 to the nonprofit Center for Economic Empowerment and Development to accept applications and determine who qualifies for loans.
McElvine, the owner of 3K Stylez Barber and Beauty Shop at 3300 Rosehill Road, was forced to close on March 25 due to Governor Roy Cooper’s order. He said he had previously called a city official about an emergency “bridging” loan to help him get through the coronavirus pandemic.
He is not alone.
City officials say at least eight other businesses have inquired about the loan program, which would not be official until Monday night’s vote.
“(The loan) will help me catch up on my store rent and lighting bills and help me around the house as well,” McElvine said.
McElvine said he had done everything he could to direct all seven of his store employees to state and federal assistance during the pandemic.
As for him, he said he had hit a brick wall like other small business owners trying to apply for public or financial help to keep the business he had operated for seven years afloat.
He said he continues to receive letters from the state delaying when barber shops can reopen.
“We were supposed to be open on April 8,” McElvine said. “I was supposed to get confirmation on this opening, but then (the state) pushed us back. I sent emails to employees just to keep them informed. It’s a little frustrating.
He added that the situation gives him “some anxiety, worrying because you don’t know if you are going to be able to open your business”.
“You don’t know if you’re going to be able to keep your employees,” McElvine said. “You don’t know if they’re going to try to do something else (for a job.). We just have to watch everything that is going on. The worst part is that we have no control over it.
Suzy Hrabovsky, administrator of the Center for Economic Empowerment and Development, said if city council approves the program on Monday, nominations could start going on Wednesday next week.
She said that under federal law, the city cannot charge an interest rate lower than that charged by private banks, so the plan is to charge the prime rate plus 1%, which is an interest of 4.25%.
She said she hoped the first loans could be disbursed 15 days after council approval.
Councilor Kathy Jensen, a small business owner and chair of the council committee tasked with helping small businesses in the pandemic, said the city is already receiving a “huge” response from business owners who want to apply for loans.
“Businesses need capital and they need loans fast,” Jensen said. “They don’t need time to wait for grants which take between a month and a month and a half (to be awarded), so we designed this program that can get them the money quickly.”
Councilor Johnny Dawkins, who is an insurance businessman who was also on the committee that recommended the loan program, said the city will charge the lowest interest rate allowed under federal law .
Dawkins said he felt the city was getting a good deal from the Center for Economic Empowerment and Development by only charging $ 10,000 to handle the loan process.
Dawkins said the city lacks the capacity to administer the loans.
“We have to pay someone (to administer the program), and it doesn’t have to be the town of Fayetteville,” he said. “We don’t have a setup. We are generally not an entity that lends money. “
Editor John Henderson can be reached at [email protected] or 910-486-3596.