Gov. John Bel Edwards today announced creation of the Louisiana Loan Portfolio Guaranty Program, which will offer loans of up to $100,000 to Louisiana small businesses impacted by COVID-19 and who have 100 or fewer employees.
To help Louisiana businesses sustain operations, the loans will require no payments for 180 days and carry below-market interest rates of no more than 3.5%.
The program is a partnership of Louisiana Economic Development, which will provide a loan guarantee fund; the Louisiana Bankers Association, whose membership will provide the loans; and the Louisiana Public Facilities Authority, which will administer the program.
A total loan pool of $50 million will be quickly dispensed to eligible small businesses across Louisiana.
“So far, we have commitments from more than 30 banks across Louisiana who have agreed to participate in this program,” Edwards says in a prepared statement. “We believe it will be instrumental in helping our small businesses recover from the COVID-19 crisis.”
The Louisiana loan program partners—LED, LBA and LPFA—envision helping small businesses meet critical needs for operating their firms during and beyond the disruption from the COVID-19 pandemic.
“The beauty of this program is we are not competing with the essential financial products offered by the U.S. Small Business Administration, we are complementing SBA,” LED Secretary Don Pierson says in a prepared statement. “Our bankers know their customers well. They have confidence in the LPFA to administer this program in a professional, proactive manner; and they have the further confidence of an LED loan guaranty fund that will enhance the security of these loans.”
The loans will provide up to $100,000 in immediate financing to help small firms meet their payroll, retain employees, pay their rent and mortgages, and keep their lights on and their doors open. Interested businesses may find loan details online here, and a list of participating bankers will be posted on the site by Friday as banks complete their participation agreements. Through the program, bankers will have the flexibility to extend loan terms for up to five years, while interest rates will be below conventional commercial lending rates and no higher than 3.5%. To date, participating banks have requested allocations for about two-thirds of the $50 million in loan capacity available through LPGP.