The Santa Clara County Board of Supervisors voted unanimously Dec. 8 to partner with the state’s “California Rebuilding Fund,” hoping to provide as much as $100 million in loans for county small businesses, and to provide an immediate $6 million for low-interest loans for businesses as a first step in a phased approach to a larger loan program.
A contract for the program—first proposed on Oct. 20 by county supervisors Joe Simitian and Susan Ellenberg—is expected to come back to the board for a vote in January.
Simitian applauded his colleagues for supporting the program.
“These small businesses are the backbones of our communities, providing employment and economic stability for hundreds of thousands of residents across the county,” he said. “They are hurting desperately right now.”
Simitian noted that while the county’s own budget is strained as a result of Covid-19 expenditures and lost revenue, “A soundly structured loan program allows us to provide significant help while eventually recovering the funds. If we’re thoughtful about it we can be both bold and prudent at the same time.”
The California Rebuilding Fund is a sole member Public Benefit LLC managed by Kiva Capital Management that executes loan agreements from financial institutions and other lenders, as well as accepts donations for the fund. The local Community Development Financial Institutions will then lend to small businesses.
This initial allocation of $6 million is “just a first step,” Simitian said.
County administration will be reporting back to the board in February with options for additional allocation and support efforts.
“By recycling and re-lending funds as they are repaid to the county, we hope to leverage the funding we invest to lend greater amounts over time while minimizing the need for county dollars,” Simitian said.
The loans are expected to:
• Have a three- to five-year term;
• Range from $5,000 to $100,000;
• Have a 4.25 percent interest rate; and,
• Be available for qualifying small businesses with 50 or fewer full-time employees.
Pre-applications for the California Rebuilding Fund loan program are now being accepted at connect2capital.com/p/californiarebuildingfund.