0630_dnr_Business Loan Forgiveness_1

Paul Hansbarger, owner of Lineage in Harrisonburg, attaches straps to a tote bag on Tuesday afternoon. Lineage was able to keep Hansbarger and three other part-time employees on payroll because of the city’s business loan program.

Paul Hansbarger, the owner of Lineage, a Harrisonburg bag producer, borrowed money from the city through the Disaster Impact Loan Program during the COVID-19 pandemic to help keep himself and three of his part-time employees from falling off payroll.

However, businesses like Lineage are still feeling the impacts of the COVID-19 pandemic, and the original terms of the loan would require repayment to begin today, according to Brian Shull, the economic development director for Harrisonburg.

So at its last meeting, City Council voted to forgive $105,000 in the loans it had given to over 20 city businesses after it received funding from the CARES Act, some of which would go to businesses through grants.

City Attorney Chris Brown said during the meeting that it would be unfair to the businesses that took out a loan if they were forced to pay back the money while other businesses got grants.

“It’s huge for us,” Hansbarger said. “It’s an amazing gesture. We, like many businesses, have kind of had a hard time with our retail store being closed. That makes up a big portion of our sales and revenue.”

The city received $4.6 million from the CARES Act, according to Shull, some of which could find its way to keeping Harrisonburg employees working and businesses productive.

“Staff is analyzing how best to distribute that, but a part of that will be used for grants for businesses,” Shull said.

For businesses that did not take out loans from Harrisonburg’s Disaster Impact Loan Program for fear about being able to pay them back, the new grants could offer support, according to Shull.

Along with Lineage, 22 other city businesses applied for the city’s interest-free loans, according to Shull. Each business received between $3,000 and $5,000, he said.

In addition to receiving support from the city, Hansbarger said Lineage has adapted during the pandemic, making masks for sale and donation to local nonprofits to help stem losses from traditional business.

“Our sales are down significantly from where they have been in the past, so when I heard that our loan with the city was going to be forgiven, it was amazing news and we’re really grateful for that possibility,” Hansbarger said.

City Councilman Chris Jones said the city needs to look out for its local business owners.

“Forgiving these loans is a small investment compared to the large investment business owners and residents have made by investing their savings and their blood, sweat and tears into building the economy of Harrisonburg,” said Jones.

Contact Ian Munro at 574-6278 or imunro@dnronline.com. Follow Ian on Twitter @iamIanMunro

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