No-interest loans are available to St. Louis businesses damaged by tornado

Businesses that suffered damage from the May 16 tornado can now apply for zero-interest loans provided by the St. Louis Local Development Company.

The nonprofit corporation will provide up to $5,000 to for-profit organizations. Proceeds can be used for working capital needs or to purchase inventory or equipment.

The company’s buildings must have suffered physical damage from the storm to qualify for the funding. Groups that experienced a disruption to business operations are also eligible to apply.

The St. Louis Development Corporation and STL Partnership are working with LDC to manage around $2 million in tornado recovery loans.

Many businesses were severely impacted, and some are unable to return to normal operations, said Deion Broxton, a spokesman for the St. Louis Development Corporation. The storm caused at least $1 billion in property damage, and more than 10,000 buildings in the tornado’s path sustained damage.

He said the loans are intended to provide short-term relief as organizations await assistance from the Federal Emergency Management Agency and the Small Business Administration.

“One thing that we’ve been hearing is that businesses don’t want to take out a loan just to pay back more money,” Broxton said. “So obviously, that’s why we have no interest with this LDC loan. It’s just like a family member letting you borrow money without charging you interest.”

Otis Williams, interim president and CEO of SLDC, said it’s just a temporary measure.

“We know this funding won’t solve all the problems our business community suffered, but it’s a small piece of the puzzle,” Williams said.

Broxton said the reason nonprofits are excluded from this round of loans is because for-profit groups mainly rely on foot traffic to sell their services, while nonprofits rely on donations and sponsorships to sustain their budget.

But that doesn’t mean nonprofits are forgotten, he said.

“We thought this would be the most immediate need in the interim, while we look for other solutions to help nonprofits as well,” Broxton said.

The corporation assessed businesses shortly after the tornado hit and ranked the extent of damage from 1 to 5 — with 5 being the worst.

“A good portion were in that 4 to 5 range,” Broxton said. “Some of these businesses can’t open their doors right now, so this $5,000 loan could be (used) to replace items that they have.”

Officials say businesses located within the defined path of the storm will be prioritized. Businesses must be located in the city or plan to reopen in the city to apply.

“We hope this funding helps impacted companies as the community continues to recover,” Rodney Crim, CEO and president of STL Partnership, said in a statement.

The deadline to submit an application is Aug. 29.