The clock is ticking for Chicago’s decimated small businesses and retailers.
The average small business in the city has less than 28 days of cash on hand, according to Crain’s, with the coronavirus pandemic having upended the economy. On Saturday, Gov. J.B. Pritkzer’s statewide shelter-in-place order took effect, severely restricting businesses.
Now, the city is opening loan applications to qualifying businesses through its $100 million Small Business Resiliency Fund, according to Crain’s. The five-year loans are at an unspecified interest rate, according to the report. City officials have already seen an influx of businesses applying for the loans, of up to $50,000 each.
“Over 300 businesses have expressed interest overnight,” Deputy Mayor Samir Mayekar told Crain’s. “We have a duty to try and help them bridge their cash flow.”
In order to qualify, applicants must have fewer than 50 employees and less than $3 million in gross annual revenue. Additionally, they will have to show at least a 25 percent revenue decrease due to Covid-19, which is expected for many small businesses with the shelter-in-place order and with most of the workforce instructed to work from home.
“Because of social distancing, all of them are shut down,” Lotika Pai, of the Women’s Business Development Center told Crain’s. “Unlike big companies who have larger cash reserves, they really are going to face a cash crunch relatively soon… In the short term it will be crippling.”