How do I apply for a loan?
Loan application should be completed through a participating lending institution. Once the loan application is approved, the Lender will then submit an application to the City (on behalf of the borrower) to participate in the City’s Interest Subsidy Program (ISP). A list of participating lenders can be found HERE.
How do I know if my business is eligible?
Businesses operating within the corporate limits of the City of Auburn that certify their need for the loan because of the current economic climate and the effects of the COVID-19 pandemic are eligible. Your Lender will be able to tell you if you meet these requirements. Lenders may have other eligibility requirements for loan applicants.
Are all loans eligible for an interest subsidy?
No, this program is designed to assist businesses who are strapped for cash due to reduced operations during the COVID-19 pandemic. Therefore, only working capital loans used to finance companies' everyday operations are eligible.
How does this interest subsidy work?
You get a loan and the City subsidizes your interest expense! The City of Auburn will enter into an agreement with a participating lending institution to pay interest on your Working Capital Loan of up to $25,000 for up to 36 months at a rate of up to 4%.
I don’t bank with any of the institutions listed. Can I still participate?
Yes, you can still apply with one of these participating lenders. If your preferred lending institution is not listed as a partner today, it does not mean that they will not join the program later. If you are interested in participating in this program, you should connect with a partner institution first.
I’m not a member of the Auburn Chamber of Commerce. Can I still participate?
Absolutely, this program is available to ALL businesses operating within the corporate limits of the City of Auburn seeking a working capital loan to mitigate the effects of the economic downturn caused by the COVID-19 pandemic.
When do I submit my application to the City?
You don’t. The application to participate in the ISP should be submitted to the City by your Lender along with a commitment letter stating the terms of your loan.
Is the City making its own loans?
No, the City of Auburn is entering into agreements with participating lending institutions to pay the interest on Working Capital Loans made by the lender. The City is not making loans, and the City is not responsible for the principal loan amount when the loan is due.
Why does it take so long for the approval process?
The City of Auburn is operating this program under Amendment 772 of the Constitution of the State of Alabama, as amended. Amendment 772 requires the end beneficiaries of government funds be advertised seven days prior to a required public hearing on the matter. Therefore, each application will require legal notice of all member beneficiaries or all members/owners/partners of a business as outlined in the company’s operating agreement as well as a public hearing and approval of the City Council of the City of Auburn.
I’m hoping to borrow more than $25,000 or have a term longer than 36 months. Can I still participate?
Yes, all terms and credit conditions of the working capital loan are determined by the participating lending institution; however, the City will only subsidize the interest on $25,000 of the working capital loan for a period of 36 months.
Can I still apply for an SBA Disaster Loan (EIDL)?
Yes. This does not affect any eligibility with state or federal financial relief.
What should I do first?
Talk with one of the participating lending institutions. They can answer your questions about your unique financial circumstances. They will get the application process started with the City.
Who will I make my payments to?
Your lending institution.
What collateral or documentation do I have to provide?
All collateral and documentation decisions are determined by the participating lending institution. The City will subsidize the interest of the loan, but the loans are handled by the lending institution themselves, who may have their own applications and requirements.
What will the City do with the information required in the application?
The City will use the information submitted in the ISP application to give legal notice of the end beneficiaries of the program. Please be aware that that the City of Auburn, Alabama is subject to the public record laws of the State of Alabama. This application as well as documents and information submitted to the City relating to this Application may be public records. The City will take all reasonable steps to keep proprietary information confidential, but the City may be required to disclose such information by court order.
If you have a question that is not answered on this page, please email Leslie B. Chambers at [email protected] for assistance.