St. Peter COVID-19 Emergency Micro Loan Program - Auto Repair

Automotive repair businesses were added by the city to list of eligible businesses for the St. Peter COVID-19 Emergency Micro Loan Program. (Metro Creative image)

With over $400,000 in loans distributed, the city’s emergency COVID-19 Micro Loan Program has proven a hit for the business community. And it just keeps expanding, with the City Council voting unanimously May 11 to include automotive repair among the eligible business sectors.

As the pandemic and associated shutdowns have sucked money out of the local economy, businesses have searched for ways to stay afloat. There are state and federal assistance programs set up, some offering forgivable loans. But that’s not always enough, the process can be slow, and some businesses don’t even qualify.

The latter was the case for Ty’s Automotive, a vehicle repair business in St. Peter. Owner Ty Saiki made the request to the city to include automotive businesses under the loan program. He noted that his business, even though it’s considered essential and remains open, has lost significant revenue over the course of the pandemic.

“In Ty’s letter making the request, he essentially said his business is going broke,” Wille said. “As people have driven fewer miles, those repair services necessitated by mileage are not occurring at the speed they previously had.”

The council was easily convinced of the need, and voted 7-0 to add automotive repair as an eligible business sector. They took a recommendation from the Economic Development Authority, which also agreed automotive repair should be added.

“I have no questions. I’m very much in favor of this,” Councilor Brad DeVos said. “As I like to say, they are a business in St. Peter, and they need help.”

Councilor Shanon Nowell asked how many businesses would become eligible for the loan program through the addition of automotive repair, and Wille said city staff counted six businesses. He noted that Ty’s Automotive was the only one, thus far, that had expressed interest in utilizing the program.

Before the automotive repair addition, the council and EDA previously agreed to add birthing centers and medical offices among the eligible businesses. When the program was first established in April, only those businesses directly impacted by the shutdowns were eligible, but the city learned about more sectors impacted as the weeks progressed.

The program has been “very, very popular and well received,” Wille noted. Councilor Stephen Grams agreed.

“I talked to a business owner recently, and she thanked the city for the micro loan program and said without it, she probably would’ve closed her doors,” Grams said.

Under the developed guidelines, St. Peter businesses are eligible for loans of up to $10,000 offered at 0% interest. Repayment of the loans is deferred for approximately 12 months and begins in June 2021. When repayment begins, the note is to be repaid at a rate of $100 per month, regardless of the loan amount.

To receive the maximum loan of $10,000, the business needs to demonstrate that they have lease, rent or mortgage expenses and monthly utility charges that total at least $2,500 per month. If the eligible expenses do not total at least that amount, the business is eligible for less than the maximum of $10,000.

The program mirrors a similar one from 2009, when the city offered the Construction Mitigation Micro Loan Program, while Hwy. 169 was closed for reconstruction. In a memo to the current EDA and City Council, city staff noted, “In 2009, businesses reported that the assistance was very helpful and allowed them to stay current on their lease and utility payment obligations, which allowed them to keep their doors open to the limited business that was available.”

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