Answer Man: Helene Business Recovery Fund borrowers facing skyrocketing rates? Messy I-26 median?
Today’s round of questions, my smart-aleck replies and the real answers: Question: You should look into the disaster bridge loans a lot of people took out through Mountain BizWorks and the Golden Leaf Foundation after Helene. These were loans with a 1 percent interest rate for 12 months, which was later extended to 24 months. […]
Today’s round of questions, my smart-aleck replies and the real answers:Question:You should look into the disaster bridge loans a lot of people took out through Mountain BizWorks and the Golden Leaf Foundation after Helene. These were loans with a 1 percent interest rate for 12 months, which was later extended to 24 months. But when that period runs out at the end of this year, the rates are going to jump up to regular commercial lending rates. This means business owners who took out say a $50,000 loan could see their payments go from $50 to $60 a month to over $1,000 a month. And more than 800 businesses took out these loans. My answer:I’m no business expert, but if this happened to me I’d just quit. Real answer:The good news here is that the North Carolina General Assembly just took action on this issue last week, with the Senate extending the 1-percent interest period again, this time for another six months. Now the House of Representatives will have to take it up, likely this week, and if they pass the measure, it will go to the governor’s desk for his signature. Matt Raker, executive director of Mountain BizWorks, the nonprofit that is administering the Helene Business Recovery Fund, said the state legislature’s movement is excellent news. “This will be a huge help for HBRF borrowers for those six months,” Raker said. “We’re hopeful we’ll also be able to work on some additional flexibility in the coming months, in particular being able to extend the loan term where needed, to lower the monthly payment to support businesses ongoing recovery. ”We’re talking about a lot of borrowers and a lot of money. Mountain BizWorks’ webpage on the loans, which were capped at $150,000, states that $59. 6 million has been deployed to 852 businesses. Raker noted that some borrowers have repaid the loans already, so the number of active loanees in the program stands at 794. State Sen. Tim Moffitt, R-Henderson County, has been working on the measure in the Senate with other legislators. He said they added six months because they “did not want to tie the hands of the next General Assembly. “We will revisit (it) during budget negotiations then,” Moffitt said. The long-term idea is to maintain a relatively low loan rate, with a longer term. “As a small business owner, that’s music to my ears,” said Moffit, whose business interests include an executive search and management consulting firm. No one is looking for loan forgiveness, Moffitt said, as that could be viewed as an “emolument,” or illegal gift. It’s unlikely for these loans to be converted to grants, either, he said. “Small business owners want to pay their way — we always have,” Moffitt said. “Lower rates and longer terms provide management relief. ”Moffitt represents Senate District 48, which includes Henderson, Polk, Rutherford counties. The measure the Senate passed last week was a “technical corrections” bill, a sort of amendment to the original legislation. The loan program emerged after Helene devastated western North Carolina Sept. 27, 2024, causing $60 billion of damages and claiming more than 100 lives. Raker said when the U. S. Small Business Administration’s loan program ran out of money shortly after the storm, the HBRF became the primary source for lending, funded by the state, the Golden LEAF Foundation, the Appalachian Regional Commission, and Abundance Capital. The idea, Raker said, was to keep businesses alive and save jobs. The program, initially viewed as a “gap filler” until the SBA loan program recovered, ended up becoming the primary business loan program. It covers 29 counties, and Mountain BizWorks says it helped retain 7,069 jobs. It took about three months after Helene for the SBA program to get its funding replenished, but by that time more requests had come in because of a hurricane in Florida and wildfires in California, so little funding flowed here. That meant North Carolina’s program remained the main source of funding for small businesses damaged by the storm. Raker said that before the recent extension came up, some loan recipients would have seen their loan rates and payments jump as soon as October or November. The long-term rate likely would have jumped from 1 percent to around 6 percent, “which is still well below commercial small business lending rates currently,” Raker said, noting some of those are in the 9 percent range. Still, even 6 percent would have been a sizable increase — especially painful when businesses are still recovering. Raker said BizWorks’ long-term hope is to double the repayment period from five to 10 years, which would cut monthly payments “in half or more. ”“Ultimately, for businesses, it’s about cash flow,” Raker said. He said BizWorks is about to publish some survey data that will show that 75 percent of businesses are still below their pre-Helene revenue levels. Right now, Raker said, the region has “no bigger economic need” or opportunity than helping existing small businesses fully recover. Local business owner Scott Fowler, one of the loan recipients, has started a coalition to represent businesses who’ve taken out these loans. “Western North Carolina’s small businesses are still climbing out of Helene, and the Senate has recognized that,” Fowler said. “Extending the 1 percent period another six months gives real breathing room to owners who aren’t whole yet. ”Fowler said Republicans and Democrats in the state House have been working together on this issue, including members of the Buncombe County delegation. “This is one of the few issues where everybody’s still listening to each other,” Fowler said. “Working alongside the Senate, the House and the Golden LEAF Foundation, we think there’s a path to terms that let these businesses finish recovering and keep employing people in this region. ”If you’re interested in joining the coalition of businesses, you can reach Fowler at scott@brucemont. com or 828-231-2223. Question:I’m a frequent traveler on the newly widened Interstate 26 between Asheville and Hendersonville. I’ve noticed there is a large amount of debris on both the inside (the median) and outside shoulders of the highway where most of the construction appears to be complete. None of the debris, except for the random discarded orange work zone barrel, appears to be construction related. There are tires, pieces of metal and wood, and every other form of detritus you can think of. Although it’s not in the roadway, it looks dangerous at worst and unsightly at best. Does the NCDOT have any plans to clean this up?My answer:I’m thinking of changing the name of this column to “Every other form of detritus. ” You’ve got to admit, it is catchy. Real answer:North Carolina Department of Transportation spokesperson David Uchiyama said safety is its top priority, “and our teams make every effort possible to keep travel lanes and shoulders clear of hazards. “Local Division 13 officials will have the contractor clear debris and clean as much as is safely possible before the contract is closed out and all maintenance responsibilities are returned to NCDOT,” Uchiyama said. Division 13 includes Buncombe County. Debris, including a metal frame of some kind, littered the median of Interstate 26 near the Airport Road exit on Monday. // Watchdog photo by John BoyleThat contract should close out late this year or into early 2027 when the contractor finishes building the new Exit 35, which will carry I-26 traffic to the Pratt & Whitney plant, Brevard Road and the North Carolina Arboretum. The widening project, which started in 2019, is running more than two years behind schedule, mostly because of the addition of the new exit. The $534 million widening project spans Buncombe and Henderson counties, with separate contractors for each county. Asheville Watchdog welcomes thoughtful reader comments on this story, which has been republished on ourFacebook page. Please submit your comments there. Asheville Watchdogis a nonprofit news team producing stories that matter to Asheville and Buncombe County. Got a question? Send it to John Boyle at jboyle@avlwatchdog. org or 828-337-0941. His Answer Man columns appear each Tuesday and Friday. The Watchdog’s reporting is made possible by donations from the community. To show your support for this vital public service go toavlwatchdog. org/support-our-publication/