Disaster Recovery Microloan

Program Goal:

The goal of the Disaster Recovery Microloan (DRM) program is to provide short-term assistance to businesses affected by disaster events in the state of Wisconsin.

This program primarily supports the following WEDC Strategic Pillar and Focus Area: Business Development: Business Retention and Expansion

Program Description:

The program will provide grants to pre-approved regional entities with the capacity to deploy rapid response microloans to businesses affected by disasters, either natural or manmade. The microloans are to assist the business with necessary restoration and operating expenses until more long-term recovery funding can be secured. Providing immediate recovery funding in this manner is a best practice in community economic disaster recovery and leads to improved odds of a business reopening and remaining open long-term. WEDC will contract with regional entities to distribute and administer these loans in their respective geographic areas of the state, as applicable.

Eligibility requirements:

DRM program grants will only be made available to regional entities where WEDC has an agreement in place outlining the grant obligations and terms and conditions of the microloan program.  Within 30 days following a natural or man-made disaster event, which may or may not include a corresponding State of Emergency or Disaster Declaration, the pre-approved regional entity will request allocation of funding to make microloans in its respective region. WEDC will expedite review and approval of the request.

Eligible Microloan Recipients:

  • DRM program funds are available to businesses meeting the following criteria:
    • Must be located in or directly adjacent to a region where the authorized regional entity has received an allocation
    • Must have suffered measurable physical damage because of the disaster event
    • Must attest to intent to resume business operations in the community as quickly as possible

Ineligible Businesses:

The following businesses are ineligible for DRM microloan funding:

  • Payday loan and title companies
  • Telemarketing other than inbound call centers
  • Pawn shops
  • Liquor stores
  • Adult entertainment venues
  • Home-based businesses
  • Farms

Eligible Activities:

DRM program funds may be used for the following activities:

  • Procurement of cleanup and restoration services
  • Operating expenses such as payroll
  • Temporary space
  • Repair and reconstruction

Incentives and Available Funding (FY19): $2,000,000

The incentives in this program are grants to pre-approved regional entities based on need related to the disaster event to provide microloans to affected businesses under the following conditions:

  • Amount: Up to $15,000
  • Term: 24 months with no early repayment penalty
  • Deferral: Minimum of six months
  • Interest Rate: The interest rates for loans will be 0%
  • Collateral and guarantees should be considered

Loan repayments may be retained by the regional entity for other economic development uses. The regional entity has the authority to make forgivable loans, as long as the provision for such is stipulated in the loan agreement. As part of the grant award, the regional entity may receive up to $5,000 for the cost to prepare a schedule of expenditures in accordance with § 238.03(3)(a).

Activities and Expected Outcomes:

Nine regional organizations approved to administer the program covering all 72 counties.

Performance Reporting:

Recipients of DRM grants will be required to periodically submit a performance report documenting the businesses assisted, as well as any other contract deliverable. WEDC may impose additional reporting requirements to evaluate project performance and to ensure compliance with contract deliverables.

Application and Awards Process:

Pre-approved regional entities should complete an application through an Account Manager. The completed application will be assigned to an underwriter for expedited review and approval. For more information on application review, internal process, and award distribution, please refer to WEDC’s award administration policies and procedures.