Small businesses have repaid more than $3.2 million in county loans provided three years ago to help them survive COVID pandemic

Total remaining balance less than $400,000

In early April 2020, with the COVID-19 pandemic threatening to ruin businesses as people stayed home in an effort to stay well, the Sarasota County Commission approved what was called the Small Business Resiliency Loan Program. That was to provide approximately $4.4 million from the county’s Economic Development Fund, which had been set aside for the county and the Economic Development Corp. of Sarasota County (EDC) to use in attracting and retaining businesses that would offer careers with better-than-average compensation.

Commissioner Michael Moran, then the chair of the board, passed the gavel to then-Vice Chair Alan Maio, so Moran could make the motion to establish the program.

“We need to get this money on the street, knowing that it’ll come back into the fund for us to carry out the mission of attracting and retaining folks here,” Moran stressed.

His motion called for up to $25,000 to be loaned to any business that had submitted an application to the federal Paycheck Protection Program (PPP).

Additionally, at the recommendation of then-Commissioner Charles Hines, who is an attorney, Moran authorized then-County Attorney Frederick “Rick” Elbrecht to create “whatever documentation he felt would be necessary to secure that loan.”

Hines had suggested each loan recipient sign a promissory note and a personal guarantee, to ensure the loan is repaid to the Economic Incentive Fund.

To be eligible for a loan, a business had to provide copies of its Sarasota County business tax receipt, with a county address attached to it, for the previous three years; it also had to provide the EDC a copy of its application for the federal Paycheck Protection Program — even if the company was unable to submit that form to a bank for processing before the federal money ran out. Additionally, each company was required to fill out online what was described as a simple county application for a loan through the resiliency program.

Further, the funds were to be restricted to businesses with fewer than 50 full-time employees, as Commissioner Moran emphasized.

Ultimately, the commissioners agreed that no payment would be necessary for the first year of a loan; subsequently, beginning in June 2021, the business had to pay 3.5% interest per year to keep the funds for an extra three years. If 80% of the loan principle were repaid prior to June 1, 2021, the outstanding 20% would be converted into a grant and the remainder of the borrower’s payment obligations would be forgiven.

Even though the majority of the board members agreed with the merit of the program, Hines expressed concerns about businesses being able to repay the loans. At that point, with no vaccines available and no definitive timeline for when vaccines might win federal approval, no one could predict how the pandemic would end up affecting not only the county’s economy but also the state and federal economies.

Finally, on April 22, 2020, after the commissioners fine-tuned the criteria for the applicants, Hines ended up casting the solitary “No” vote. During the April 8, 2020 discussion, he had pointed out that if he and his colleagues gave up the Economic Incentive Fund money to help local businesses, “Then we’ve lost the opportunity potentially down the road … for the big business that finally says, ‘I’m leaving New York or New Jersey; help pay my impact fees; I’m coming [to] create careers in Sarasota County.’ That’s this debate. … If we are going to support [a loan program], to me, it’s got to really make a difference for our community. It’s not just, ‘Hey, here’s your money, [so] open back up.’ ”

Prior to that April 22,2020 vote, Moran did emphasize the need for a personal guarantee from the “owners, shareholders or members of any type [involved with the company applying for the loan].” He added that people who accepted the loans “better be ready to pay [them] back.”

Fast forward to June of this year: Rob Lewis, director of governmental relations for the county, noted during his June 20 budget presentation for the 2024 fiscal year that the county had collected “almost $3.2 million” of the funds distributed to small businesses through that program. The commissioners forgave $500,000, because of companies making early repayments, Lewis reminded them.

One year is left to collect the rest of the funds, he noted.

Lewis had provided the commissioners a more detailed update on June 16, via email.

“[A]s of Friday June 16, 2023, we have collected $3,211,494.62 of the $3,610,469 (88.9%) due back to the county,” Lewis wrote. “The loans were provided to qualified businesses with 50 or less employees in 2020 (prior to release of CARES (funds) and ranged from a few hundred dollars to a maximum of $25,000. Recipients have until June of 2024 to fully repay. We continue to encourage early pay-off.”

Lewis further noted, “Of the original 200 loans, 117 [businesses] repaid the required 80% and were deemed eligible for the remaining 20% as a grant conversion per Board direction.”

Lewis included the following figures in his email:

  • “Total Loan Amount Awarded — $4,119,011.91.
  • “Total Loan Amount Converted to Grant — $508,542.49.
  • “Total Loan Amount Repaid to Date — $3,211,494.62.
  • “Total Loan Remaining Balance to Date — $398,974.80.

Commissioner Moran responded thus: “Absolutely fantastic work Rob!!”