HomeMy WebLinkAboutMemo - Mail Packet - 11/22/2022 - Memorandum From Seonah Kendall Re: Update On Larimer County Small Business Loan Fund
Economic Health Office
222 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.416.2164
fcgov.com/business
MEMORANDUM
DATE: November 15, 2022
TO: Mayor and City Councilmembers
FROM: SeonAh Kendall, Economic Health Director
THRU: Kelly DiMartino, City Manager
Tyler Marr, Deputy City Manager
Travis Storin, Chief Financial Officer
RE:
UPDATE ON LARIMER COUNTY SMALL BUSINESS LOAN FUND
This memorandum is to provide an update, and potential next steps, on the Larimer County Small
Business Loan Fund (“Loan Fund”) created in April 2020 during the early stages of the COVID-19
pandemic.
BOTTOM-LINE:
The Loan Fund accomplished its desired outcome of rapidly providing and dispersing low-cost debt
capital to underserved companies in Larimer County that were negatively impacted by the COVID-19
pandemic.
Summary of the Fund:
The $5M Loan Fund program was created to support small companies (20 or fewer employees) who
were adversely impacted by COVID-19 and were unable to access other Federal relief programs such as
the Payroll Protection Program in early 2020.
As of September 30, 2022, 92.7% of the $5 million (“M”) loan fund has been deployed with
$360,000 remaining, with an additional 12 – 15 loans being evaluated (totaling over $1M).
The Loan Fund has collected principal repayment of over $1.44M and written off 2 loans for a
total of $72,000.
161 loans have been dispersed, with the average loan at $40,000.
BACKGROUND:
The Loan Fund was a regional initiative led by the City of Fort Collins (“City”), the Fort Collins Area
Chamber of Commerce and Bohemian Foundation. Additional contributors and partners included: City
of Loveland, Towns of Windsor and Berthoud, Larimer County, Community Foundation of Northern
Colorado, as well as local banks and credit unions. Colorado Enterprise Fund (“CEF”), a 501(c)3
Community Development Financial Institution (“CDFI”), provides loan underwriting, loan
disbursement, loan servicing and all related legal compliance and oversight. Additionally, CEF is
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providing pre-loan technical assistance, credit restoration (through a 3rd party), and business literacy
education.
The City contributed $200,000 to the Loan Fund. These funds were originally in the City’s Fort Collins
Main Street Revolving Loan Fund, which was created in 2019, and was repurposed to support the
emergency Loan Fund.
Loan Fund Challenges:
Idle loan capital cannot revolve (an estimated $1.9M), as the original agreement was for one-
time use.
Loan Fund structure is for a 5-year team, which is too short for many borrowers’ repayment
debt-service coverage ratio.
Current market conditions such as inflation, tighter credit access, business growth and expansion
have created a higher request for loan funding at this time.
NEXT STEPS:
CEF has approached the City and Bohemian Foundation, along with partners, to explore options and
opportunities such as early repayment to investors or repurposing and creating a new revolving loan
fund to meet current market needs. Economic Health is exploring timeline, purchasing guidelines and
financial commitment.
cc: Gerry Paul, Purchasing Director
Blaine Dunn, Accounting Director
Josh Birks, Sustainability Services Deputy Director
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