The Kenai Peninsula Economic Development District will launch a new loan program for local businesses in the coming months thanks to a grant from the federal Economic Development Administration, and will offer guidance to businesses.
Tim Dillon, executive director of KPEDD, said Thursday that the loan program will provide up to $60,000 for each eligible applicant. He hopes to have the program up and running by the beginning of March. The loans are meant to help businesses become more resilient in the face of economic disasters, several of which have been experienced in just the past few years, Dillon said, referring to the November 2018 earthquake, the 2019 Swan Lake Fire and the 2020 COVID-19 pandemic.
The EDA has awarded a $624,000 grant to KPEDD, according to a Monday press release from the U.S. Department of Commerce, and another $176,000 was acquired from various local sources, Dillon said.
$500,000 of the EDA grant will go toward the loan program, while the remaining $124,000 will be used by KPEDD for education and outreach — for “assisting businesses in learning from their mistakes,” Dillon said.
KPEDD helped hundreds of Kenai Peninsula business owners receive CARES Act funds through the financial assistance programs offered by the state and municipalities earlier this year.
KPEDD is contracted with the borough to take on the role of economic development in the region, Dillon said, so helping business owners acquire the aid they needed was KPEDD’s top priority this summer. During that process, Dillon said he noticed several common mistakes that many business owners made, which often led to them being denied assistance or facing financial difficulties.
About 40 local businesses were denied Alaska CARES Act funds, for example, because they did not have an Alaska business license. Dillon said that most were businesses located within the borough but outside of one of the incorporated cities. The borough does not require proof of a business license when a business owner sets up their borough tax I.D., but municipalities do, so many business owners started their business and were paying taxes to the borough without an actual license from the state.
Another common business mistake Dillon noticed was with business owners in the hospitality industry. Many guests hoping to stay in lodges or take charter trips this summer booked their reservations and put down deposits months in advance. Some of those business owners spent the guests’ deposits in the winter months, either preparing their business for the season or going on vacation themselves before the summer hit. This year, the COVID-19 pandemic led to cancellations of summer trips across the board, which meant some business owners were on the hook for returning deposits that they had already spent.
Dillon said he plans to use the funds acquired through the EDA to create workshops and classes for business owners on topics like accounting and best business practices, so that they can avoid similar mistakes and be prepared when future disasters hit — whether it’s earthquakes, wildfires or a pandemic.
