In her televised “State of City” address this evening, Mayor Lightfoot announced the launch of a $100 million Chicago Small Business Resiliency Loan Fund to aid small businesses during the Covid-19 outbreak. It is a public-private partnership; contributions thus far include: $25 million-dollar from the City of Chicago; $50 million from the Chicago Community Catalyst Fund; $10 million from Goldman Sachs’ Urban Investment Group; $1 million from Fifth Third Bank; and $250,000 from Clayco Construction.
As indicated in her press release: “The new emergency fund will lend up to $50,000 in working capital loans to neighborhood entrepreneurs suffering substantial economic injury to help support rent and payroll expenses. The City will be working with a network of Community Development Financial Institutions (CDFIs), who will be responsible for providing support with application screening, credit underwriting, loan disbursements and servicing.”
In order for a business to be eligible for relief, the business must have fewer than 50 employees and must have experienced more than a 25% revenue decrease due to the outbreak. The City will begin accepting loan applications starting on March 31.
Lightfoot also announced that the City will temporarily defer all business fine collections as well as license renewal and late fees for Chicago’s businesses until April 30. The City will also suspend all non-public safety related business penalties until April 30.
To provide additional relief to small businesses the City is also extending the due date on several City taxes to April 30. These taxes include the bottled water tax; checkout bag tax; amusement tax; hotel accommodation tax; restaurant tax; and the parking tax.
Governor Pritzker announced today that he has directed the Department of Revenue to defer sales tax payments for small and medium sized restaurants and bars, which account for nearly 80% of restaurants and bars in Illinois. Eating and drinking establishments that had less than $75,000 in sales tax liabilities last year will not be charged penalties or interest on payments due in March, April or May that are late.
While penalties and interest will automatically be waived, qualified taxpayers will still be required to file their sales tax returns. Taxpayers who utilize the program will be required to pay their sales tax liabilities due in March, April and May in four installments starting on May 20 and extending through August 20.
The Governor also announced that, two days after Illinois submitted documentation demonstrating the impact of the pandemic on more than 3,000 businesses across the state, the U.S. Small Business Administration approved the state’s eligibility for disaster assistance loans for small businesses facing financial hardship in all 102 counties due to COVID-19. Eligible businesses may apply for up to $2 million in low-interest loans at https://disasterloan.sba.gov/ela.
Federal lawmakers continued negotiations today over an estimated $1 trillion “Phase III” economic stimulus package, including $300 million in federally guaranteed loans to support small businesses. Our sources indicate that local recovery plans are “top of the mind” on Capitol Hill, and that bipartisan consensus is emerging for a significant relief package – likely delivered through financial institutions – for small businesses struggling to meet payroll and other expenses. A vote is likely to take place early next week.