PLAINFIELD – Town officials this week formally rolled out two new loan programs aimed at assisting local businesses and home owners, using a relatively small portion of the town’s incoming federal COVID-19 relief funding.
The application process for the Business Revolving and the Housing Hardship loan programs opened on Monday and represent the most direct form of town-dispersed American Rescue Plan aid to residents so far.
The town is in line to receive roughly $4.5 million in federal relief monies, which the U.S Department of Treasury states can be used by municipalities to replace certain revenues lost due to the pandemic. Plainfield has so far gotten $2.2 million in such funds with a similar amount slated to be received next year.
Selectmen in August approved spending the bulk – $3.4 million – of the total funding package for a massive upgrade to the town’s wastewater treatment system. Money was also allotted to refurbish the Lions Park playscape area. The Project Pin Food Pantry and United Services, Inc. community mental health agency were also funding recipients.
The business loan program was seeded with $250,000 in federal funds and will provide low-interest loans to Plainfield-based businesses, as well as to companies willing to relocate to town, First Selectman Kevin Cunningham said on Friday.
“We’ve modeled this program on a previous business revolving loan program from the early 2000s,” he said. “Once we get an application, the Economic Development Commission will review them. That commission has an attorney and representative from the banking industry who can add their expertise before making a recommendation to selectmen.”
Eligible businesses can apply for up to $25,000 with the funds available for equipment and real estate renovations, as well as to defray salary and other day-to-day operational costs.
“There have been businesses in town that had to shut down due to COVID or could not make planned expansions – that’s what these loans hope to address,” Cunningham said. “We’ve already had four businesses looking to download the loan paperwork.”
Cunningham said as the loans are repaid, the money will be funneled back into a account which could be drawn on by new applicants. He said a 10-year loan payback period – with an interest rate not to exceed 3% – was likely to be the norm.
The parameters of the new housing hardship loan program mirrors those of a previous program for those seeking U.S. Department of Housing and Urban Development funding, Cunningham said.
“Applications will first be reviewed by building inspectors to make sure they meet our criteria and even then it’s not a matter of us just cutting them a check for a certain amount,” he said. “The town will send the work out to bid to contractors for them.”
The $100,000 pool of repair money can only be used for “non-luxury” work, such as roof, plumbing, electrical or code violation repairs. Applicants must fall into the “low-to-moderate” income bracket set out by the federal government and a lien will be placed on any successful applicant’s property for the duration of the loan.
Single-family home applicants can seek up to $15,000 in loan funding and two-family home owners are eligible for a $20,000 loan package. The interest on the repair loans will top-out at 3%, but might come in lower depending on an applicant’s specific situation.
“COVID had a major financial impact on many Plainfield families and this program was established to help relieve some of those financial burdens,” Cunningham said. “With both these programs, we wanted to really key-in to people who lost jobs or couldn’t keep their businesses going because of the pandemic.”
Cunningham said one homeowner has so far filled out hardship program paperwork.
At a glance
To apply for either the town’s Business Revolving Loan or Housing Hardship Loan programs, go to https://www.plainfieldct.org/business/economic_development/index.php or contact Jordan Lumpkins at [email protected]
Jordan Lumpkins, the town’s grant writer and manager of both loan programs, said his job will be to walk folks through the application process from the initial paperwork through the final contracts.
“The whole idea of these programs was to try and get people the capital they need,” he said. “A lot of people lost jobs because of COVID and couldn’t make those home repairs.”
Lumpkins said applicants don’t necessarily have to show proof their loan requests are directly related to pandemic woes, though data shows certain population demographics were disproportionately affected by the virus outbreak.
“That includes the elderly, people in fixed incomes and people with disabilities,” he said. “We have residents who were working low-income jobs that didn’t lose their positions during the pandemic and did not qualify for the kind of unemployment benefits that those who lost higher-paid jobs got. This is our opportunity to help those people.”
Lumpkins said the programs are starting with a limited funding base, but that could change.
“There’s still money out there that could let us expand these offerings and we hope if people pay back these loans in a timely way, we can make these programs sustainable.”
John Penney can be reached at [email protected] or at (860) 857-6965