Development district launches new loan program
The Kenai Peninsula Economic Development District will launch a new loan program for local businesses in the coming months with a grant from the Federal Economic Development Administration, and will offer business advice.
Tim Dillon, executive director of KPEDD, said Thursday that the loan program would provide up to $ 60,000 to each eligible applicant. He hopes the program will be operational by the beginning of March. The loans are meant to help businesses become more resilient in the face of economic disasters, several of which have been experienced in recent years, said Dillon, referring to the November 2018 earthquake, the Swan Lake fire. 2019 and COVID-2020. 19 pandemic.
The EDA has awarded a grant of $ 624,000 to KPEDD, according to a press release issued on Monday by the US Department of Commerce, and an additional $ 176,000 has been acquired from various local sources, Dillon said.
$ 500,000 of the EDA grant will go to the loan program, while the remaining $ 124,000 will be used by KPEDD for education and awareness – to “help businesses learn from their mistakes,” Dillon said.
KPEDD has helped hundreds of business owners on the Kenai Peninsula receive CARES law funds through financial aid programs offered by state and municipalities earlier this year.
KPEDD has contracted with the borough to take on the role of economic development in the region, Dillon said. Helping business owners get the help they needed was therefore KPEDD’s top priority this summer. During this process, Dillon said he noticed several common mistakes made by many business owners, which often resulted in them being denied help or facing financial hardship.
About 40 local businesses were denied Alaska CARES Act funds, for example, because they did not have a business license in Alaska. Dillon said most were businesses located in the borough but outside of one of the incorporated towns. The borough does not require proof of a business license when a business owner establishes their borough tax identification number, but municipalities do.
Another common business mistake Dillon noticed involved business owners in the hospitality industry. Many guests hoping to stay in lodges or take charter trips this summer have booked their reservations and made deposits months in advance. Some of these business owners spent the customer deposits during the winter months, either to prepare their business for the season or to go on vacation themselves before the summer started. This year, the COVID-19 pandemic resulted in the cancellation of summer trips across the board, meaning some business owners had to pay back deposits they had already spent.
Dillon said he plans to use the funds acquired through EDA to create workshops and courses for business owners on topics such as accounting and best business practices, so that they can avoid similar mistakes and be prepared for future disasters, be it earthquakes, wildfires or a pandemic.