Qualified small businesses in Pueblo will be eligible for loans of up to $100,000 and grants of up to $20,000 as part of a plan unanimously approved Monday night by the City Council.
A total of $5 million will be transferred from a voter-approved half-cent sales tax used for creating businesses in the city.
Businesses can begin applying for the money Tuesday afternoon on the city website. The application period ends Oct. 1.
"We want to make this process simple," said City Attorney Dan Kogovsek. "We want to review the applications and get back to the businesses as soon as possible. The mayor and a three-person advisory committee, comprised of people from the banking and economic development professions, will review the applications."
Kogovsek said business owners will have 10 years to repay the loans, "at competitive interest rates."
"We want to know what you plan to do with the money," he said. "It's not for payroll. It's to keep people in business when they reopen. You can pay rent and mortgage, do construction projects, make changes to your business, set up screens and customer distancing to become COVID-19 compliant."
Kogovsek said Mayor Nick Gradisar and the advisory committee will also provide oversight to make sure the money is not misspent and won't pay for needs that are already met by federal and state assistance programs.
Transferring such a large amount of money during the economic uncertainty created by the coronavirus epidemic worries Councilwoman Lori Winner.
"We need to meet (soon) to start talking about this budget and what we're going to do to save ourselves," she said. "We're looking at a $9 million deficit in our sales tax budget -- maybe more."
Gradisar said he is monitoring the budget, adding that the federal government could reimburse municipalities for money lost during the crisis.
Councilman Mark Aliff said the move is necessary to save Pueblo's small businesses and get them ready to return to full operation as soon as possible.
"If the half-cent sales tax money is meant for anything, it's meant for our community, to save jobs and keep people working," he said. "I wholeheartedly support this."
The council held its meeting on the Zoom video conference website, which allowed most members to participate from home and obey social distancing guidelines.