Royal Oak encourages small businesses to apply for loan program

By: Sarah Wojcik | Royal Oak Review | Published June 23, 2020

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ROYAL OAK — To date, two businesses have applied for a $265,523 loan program for eligible businesses in the city of Royal Oak, and one was deemed ineligible due to its location in the city’s downtown district.

On June 8, the Royal Oak City Commission approved the funds to financially assist small businesses affected by COVID-19, made possible through Royal Oak’s allocation of Community Development Block Grant funds from the federal CARES Act.

The program can provide small businesses with forgivable loans up to $15,000 for payroll, rent, mortgage interest or utilities expenses. Eligible businesses must have fewer than 50 employees and be located outside of downtown Royal Oak.

Businesses in the downtown district are ineligible because the Downtown Development Authority already awarded $1.3 million to 92 restaurants, retailers, salons, cafes and entertainment businesses through its $2 million Rebound Royal Oak Small Business Assistance Program.

The city may forgive the loan after six months if the assisted small business can demonstrate that it successfully created new jobs or retained jobs for employees living in low- and moderate-income households.

Royal Oak Director of Planning Joseph Murphy said the program is designed around federal requirements and will remain in effect until the funds have been allocated. He encouraged small businesses to review the program application online.

To be eligible, at least 51% of all employees must certify they live in low- to moderate-income households. For example a single-person household of up to $44,000 and a four-person household of up to $62,800 would both qualify as moderate income.

Murphy said he felt that more businesses may not have applied because they possibly may not be comfortable asking about the personal finances of employees or that they simply are not aware of the program. There are also a variety of federal and local grant and loan programs in existence.

While the current deadline for applications is June 26, Murphy said he is “more than willing, able and happy” to extend the deadline for however long it takes. He said that when he set the date, he was not sure if there would be a huge influx of applications.

“Obviously, incomes have changed and many things have changed significantly in the last four to five months,” he said.

The city received a total allocation of $702,441. While it opted to funnel 37.8% of the funds into the small business assistance program, it also allocated 60%, or $421,465, to social and public service activities, including emergency food distribution, hotel vouchers for the homeless, and a rent/mortgage/utility assistance program.

“City staff does not have the expertise or the organizational capacity to administer the identified public service activities. Therefore, on May 20, 2020, staff distributed an application to local not-for-profits to solicit their interest in partnering with the city to provide these social/public services,” Royal Oak Director of Community Development Timothy Thwing wrote in a memo to the City Commission.

The city, in turn, received applications from South Oakland Shelter, Open Hands Food Pantry, Legal Aid & Defender Association and the Community Foundation of Greater Rochester.

Murphy said the city is currently working with its nonprofit partners and would announce upcoming social and public service events in the near future.

To view the application for the small business assistance program, visit and search for “Financial Assistance.”