MONTEREY COUNTY — Monterey County is creating an Emergency Microloan Fund within its Small Business Revolving Loan Program with Cal Coastal to assist local small businesses impacted by the COVID-19 pandemic.
The county has about $661,000 in federal funds available for lending, which could help an estimated 25 businesses, and has set aside $200,000 specifically for South Monterey County businesses.
The funds set aside for South Monterey County are expected to help between eight and 14 businesses. Local businesses have a deadline of May 15 for the funding set aside for them, and any leftover funds after that deadline will be distributed to businesses throughout Monterey County.
“There is a strong need for quickly accessible, small-sized loans to newer, smaller businesses affected by closures due to COVID-19,” said Lee Takikawa, president of California Coastal Rural Development Corporation. “Monterey County has hundreds of small businesses that could be helped with small-sized loans of $25,000 or less.”
Cal Coastal has received seven applications and approved two loans totaling $50,000 as of April 17. Takikawa noted that the small businesses already received their funding.
“Once Cal Coastal received a complete loan application with supporting documentation, they can expect to receive the emergency microloan funding within five to 10 business days,” Takikawa said.
The program is first come, first serve, and the county wants to make sure that all area businesses can access these funds.
“Our effort to amend the County’s Administrative Plan for the Small Business Revolving Loan Fund in order to create an Emergency Microloan Fund was to design quick and affordable working capital loans to assist small businesses in their effort to reopen and recover from the economic injury caused by the COVID-19 health crisis,” Takikawa said. “Small businesses are critical to our local economy and it has been heartbreaking to see them struggle during this difficult time.”
Monterey County’s Economic Development Department is proposing to set aside a portion of its existing federal loan funds for the COVID-19 Microloan Fund.
Businesses can apply for loans up to $25,000 at a reduced interest rate (rate at 75% of WSJ Prime). Loans will have up to a five-year term, with payments deferred for up to nine months (loan structure will be determined on a case-by-case basis depending on the borrower’s ability to pay). The underwriting, approval and closing process will be streamlined and designed to facilitate rapid deployment of capital to businesses in need.
To be eligible for a microloan, businesses must be located within Monterey County; should have between two and 10 employees; should have annual revenues that do not exceed $2 million; be an operating business, not a passive real estate entity; have been in business for a minimum of one year; be able to provide a 2018 Federal Tax Return and interim financial statements; present a feasible plan to recover post-disruption; and be current on federal income taxes.
The cities of Gonzales, Greenfield and Salinas have also expressed an interest in creating loan funds to assist businesses within their jurisdictions.
Cal Coastal also has other loan programs available for small businesses, farmers and nonprofit organizations, such as the Small Business Disaster Relief Loan Guarantee Program. More information about those programs can be found online.
To find out more about microloans or to apply, contact California Coastal Rural Development Corporation, which is managing this project, at calcoastal.org or 831-424-1099.
If a small business needs assistance with a loan application, they can call 831-424-1099 or visit the Small Business Development Center website calcoastalsbdc.com or call 831-676-2017 to request assistance with Spanish-speaking staff.