BATH — Bath city councilors last week passed a new emergency loan program aimed at providing immediate financial relief to small businesses losing revenue in the midst of the coronavirus pandemic.

The Economic Relief Bridge Program provides a $7,500 maximum interest-free loan to small businesses in Bath that have lost revenue due to the outbreak. The loans are funded through $300,000 in Bath Iron Works tax increment financing, or TIF, revenues earmarked for economic development.

Sally Johnstone, vice president of Main Street Bath and a member of Bath’s Economic Development Committee, said the committee started the program to help local businesses who are stuck waiting for federal loans that may never come.

“If anything is worth TIF funds, it’s helping your small businesses in the midst of an unprecedented pandemic,” said Johnstone. “We want our small businesses to come back as strong as ever when this is all over.”

The Bath City Council approved the loan program Wednesday, only Councilor Aaron Park didn’t vote in favor. Park, the co-owner of Centre Street Bakery, abstained from the vote because he said he plans to apply for this loan himself.

“It doesn’t take very long to realize how much of a challenge this is to Bath’s small businesses,” said Marc Meyers, assistant city manager. “This is a chance for the city to get involved and lend a helping hand.”


The terms of the loans are two years, zero-interest, with deferred payments for the first 12 months. The loans may be forgiven as long as the funds are used to cover payroll, mortgage interest, rent and utility costs; and employee and compensation levels are maintained or are returned to levels as of Feb. 29, 2020, on or before April 15, 2021.

“Hopefully business owners who apply for this are looking to fill and need instead of maxing out the program,” said Meyers. “That way, we can maximize the funds of the program.”

Applications and guidelines for the Economic Relief Bridge Loan Program will be available on the city’s website beginning Monday.

The program is only available to small businesses as defined by the U.S. Small Business Administration, which has varying definitions depending on the industry. A small business could be defined as a business with a maximum of 250 employees or a maximum of 1,500 employees.

There 147,270 small businesses statewide, making up 99.2% of Maine businesses, according to a 2019 report from the U.S. Small Business Administration. It is unknown how many of Bath’s businesses are classified as small businesses.

Johnstone said legally the city cannot offer the program to nonprofits because it uses TIF revenue. She didn’t know if the city will develop another loan program nonprofits could use.


Bath isn’t alone in its effort to help local small businesses. Last month, the Brunswick Development Corporation created a similar loan program for local businesses. The town was offering no-interest loans of up to $5,000 to help supplement other state and federal emergency disaster relief funding, but the fund quickly reached full capacity. Brunswick announced its website will be updated should additional funding become available.

Federally backed business loan programs have also run dry due to the amount of need.

As of April 11, more than 8,400 Maine businesses had been approved for over $1.5 billion in loans from the Paycheck Protection Program, a federal loan program intended to rescue small businesses and workers from economic devastation during the coronavirus pandemic. Thirteen days later the $349 billion Paycheck Protection Program ran out of money.

Small businesses struggling to stay afloat have had to make tough choices, such as laying off or furloughing employees or closing their doors to save money.

Since March 15, there have been more than 76,000 initial unemployment claims filed in the state, more than double the total initial claims for all of 2019.

This comes on the heels of Gov. Janet Mills extending a state of civil emergency through May 15 last week. The 30-day extension does not automatically lengthen the statewide stay-at-home order set to expire on April 30 but would allow the governor to extend it or impose new prohibitions should the virus continue to spread. Mills’ stay-at-home order prohibits Mainers from traveling outside their homes for all but “essential personal activities” such as grocery shopping, obtaining medical care or medication and exercising.

As of Sunday, 34 Maine residents have died from COVID-19, while 867 have tested positive for the disease, according to the Maine CDC. Of those who have tested positive, 393 have recovered from the disease.

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