Southwest Montana News

Butte businesses were hoping to receive loans to help with the financial crisis COVID-19 has brought, but local businesses have run into conflicts with the federal relief from county funds.

On March 25, Butte-Silver Bow commissioners had agreed to use $200,000 from an old settlement fund to supply interest-free loans to Butte businesses, according to the Montana Standard. The Butte Local Development Corp. (BLDC) had agreed to administer the loans. The funds were expected to arrive to businesses on April 3, but commissioners didn't distribute the money. 

If Butte businesses were to receive county loans, it could make some of them ineligible for federal Small Business Administration (SBA) loans, according to the report. 

The SBA's Paycheck Protection Program (PPP) allows federal loans to be completely forgiven if the money is used to pay employees, the Montana Standard said. The SBA's Economic Injury Disaster Loan Program (EIDL) are loans specifically for businesses impacted by COVID-19 and they don't have to be paid back. 

“Our funding panel reviewed both the PPP and EIDL programs and found that there could be potential conflict if there were costs that were included in both,” BLDC executive director Joe Willauer told the Montana Standard.

Both SBA programs offered grants, which don't have to be repaid, the paper said, but the loans from Butte-Silver County would have to be paid back. 

“As a business owner a grant is better than a loan, so we didn’t want to encourage business owners to take on additional debt when there could be other options that fit them better,” Willauer told the Standard. “When we reached out to borrowers and shared the federal programs that were a better fit for some of them, they chose to withdraw their application."

Other businesses ineligible for federal funding will still be applying for local loans, Willauer said in the Standard report.