The Utah Governor’s Office of Economic Development (GOED) commissioned the Sorenson Impact Center to provide the first of two reports on the impacts of its Utah Leads Together Small Business Bridge Loan program.
“In response to the coronavirus pandemic, by the end of March, the GOED team was able to create and deploy the Utah Leads Together Small Business Loan program to quickly get cash to Utah small businesses,” said Val Hale, GOED’s executive director. “This short-term study shows how effective the loan program was and highlights the different sectors that received loans.”
The Utah Leads Together Small Business Bridge Loan program was deployed to provide gap funding to Utah’s small businesses and nonprofit organizations during the initial onset of the COVID-19 pandemic. GOED administered the bridge loans in two rounds. The first round was for small businesses. The second round also included funding for nonprofits.
This loan program was the first of its kind in the intermountain region (Utah, Colorado, Idaho, Wyoming, and Montana). On March 20, 2020, the first public health restrictions were enacted. On March 31, 2020, the first round of the bridge loan was opened for business applications.
A total of $12 million was awarded to 1,150 Utah based small businesses and nonprofit organizations, which included $11 million in CARES Act funds and $1 million generously contributed by the WCF Insurance Foundation.
Loan amounts ranged from $5,000 to $20,000 and were offered 0% interest for up to 60 months. Loans were for businesses and nonprofits, and could not exceed three months of demonstrated operating expenses. Loan payments are deferred for 12 months.
“By rapidly mobilizing to provide access to flexible capital, the Governor’s Office of Economic Development offered a lifeline to small businesses seeking to protect their employees and keep afloat,” said Grant Baskerville, manager at the Sorenson Impact Center. “Through the hard work and dedication of the GOED team, they exceeded their target of delivering 25% of loans to rural businesses.”
The Sorenson Impact Center, a think tank based at the University of Utah’s David Eccles School of Business, conducted the study on the program’s short-term impacts. This preliminary report analyzes how and where the loans were deployed in the state of Utah. The full impact report will be published in the coming months.
Highlights from the report include:
- The program was purposely developed to act as a bridge between local (city and county) and federal interventions
- 1,150 loans were deployed across the state of Utah, including all but one Utah county (Millard County)
- The majority of loans given were $10,000
- 27% of loans were deployed to small businesses in rural counties (the goal was 25%)
- The program reached the hardest hit industries in the state, including food and beverage, retail, healthcare, and hospitality and leisure
- Over half of loan recipients had 10 or fewer employees (52%), and 30.8% had five or fewer employees
In total, 2,046 small businesses and nonprofits applied for the program, and 56% (1,150) obtained a loan. Almost every small business or nonprofit that qualified for the program was able to receive a loan.
“We want to let you know that we are very grateful for the offer of this bridge loan,” said Angela and Shaun Heaton of Bonneville Asphalt. “This will give us a good boost to keep our business going through these difficult times. We appreciate your confidence in us.”
Please see the full report and more information here.