Small Business Program Details
The Office of Community Development, Disaster Recovery Unit (OCD-DRU) has worked with the Louisiana Department of Economic Development (LED) and other federal, state and local economic development partners to create the Restore Louisiana Small Business Program (RLSB) to provide assistance to small businesses located in areas adversely affected by the 2016 Severe Storms and Flooding Events. OCD-DRU will provide program assistance to eligible businesses and/or non-profit organizations through participating non-profit lenders, credit union and/or community development financial institutions who will implement and administer a lending program to assist impacted businesses and non-profits.
Total funding available for the program is $43 million in loans. This program is funded through the Community Development Block Grant Disaster Recovery Program (CDBG-DR) from the U.S. Department of Housing and Urban Development.
What is provided?
Community lenders will make loans to small businesses in the 51 flood-impacted parishes to provide working capital and funds to repair or replace movable equipment and machinery. Assistance for construction-related expenses is not available through this program.
The program will make loans between $20,000 and $50,000 to eligible businesses. In certain cases, loan amounts may be higher. If borrowers comply with program requirements, provide required documentation and make payments as agreed, the loan will be interest free and 20% of the loan will be forgiven when 80% of the principal is repaid.
Who is eligible?
To be eligible for loans under the program, an applicant business must meet the following criteria:
- Must be either a for-profit business or a private non-profit organization located in one of the 51 parishes impacted by the 2016 Severe Storms and Flooding Events.
- Must have been directly impacted by the storms/floods, with a documented physical or financial loss.
- Non-profit organizations will be evaluated for eligibility and ability to service debt based on the secular operations of their organization.
- Must have eligible unmet needs after accounting for all insurance, federal, state, local and private proceeds considered to be a duplication of benefit.
- Must have been operating at the time of the respective storm or flood event. The applicant business must have been open before April 8 for the March 2016 floods and before August 31 for the August 2016 floods.
- Must either a) be currently operating or b) demonstrate the ability to reopen upon receiving assistance from the program.
- Businesses that are closed at the time of application, but who will be able to reopen upon receiving assistance from the program must have a business plan and demonstrate they have the funding necessary to reopen.
- Closed businesses must commit to re-opening in an eligible parish; they are not required to re-open in the same location in which they were operating at the time of the flood.
- Has a minimum of one full-time equivalent employee and no more than 50 full-time equivalent employees.
- Had a pre-storm minimum annual gross revenue of $25,000.
- Additionally, businesses must meet the following underwriting criteria, with exceptions considered on a case-by-case basis:
- Owners with greater than 20% ownership must have a minimum Beacon credit score of 600.
- Current business or personal debt coverage ratio of 1.1x or greater. Debt Coverage Ratio is defined as net operating income divided by total debt service.
For more information, a list of lenders and to download an application, please click here. Lenders can assist with a timeline.