New financing program available for smaller businesses in the state

Smaller businesses in California now have access to an additional $ 56.5 million through the California Rebuilding Fund, which offers flexible, low-cost loans to support long-term recovery from the COVID-19 pandemic. First announced by Governor Gavin Newsom in November 2020, the California Rebuilding Fund is a public-private partnership that combines capital from private, philanthropic and public organizations to support new loans administered by community development finance institutions ( CDFI).

Objective: Secure funding for the years to come

Born out of the recommendations of the Governor’s Task Force on Business and Jobs Recovery, the California Rebuilding Fund received an anchor commitment from the California Infrastructure and Economic Development Bank (IBank); and, although launched in response to the pandemic, the program fills credit gaps that have existed for decades and continues to increase public and private investment to ensure that financing is available to small businesses for years to come.

“It goes without saying that too many small California businesses are still reeling from the pandemic,” said Scott Wu, executive director of IBank. “Our vision is that this additional funding will not only help these business owners, their employees and their families survive, but by growing this fund through the continued support of partners across the state, we will go even further and we ensure that they prosper. . “

Early successes of the program help historically underserved people

To date, the Rebuilding Fund has provided loans to over 700 small businesses for an average loan amount of approximately $ 63,000. Over 90% of loans have gone to historically “unbanked” small businesses, which means they do not have access to credit from traditional financial institutions. These include businesses in low-income communities and those with annual sales of less than $ 1 million. The additional $ 56.5 million will bring the total amount raised by the California Rebuilding Fund to over $ 100 million, helping California’s smallest businesses – especially those in economically disadvantaged and historically unbanked or “underbanked” areas. “state – to continue to survive this economic storm and emerge with better growth prospects.

Growing base of funders and supporters

The California Rebuilding Fund is supported by public, private and philanthropic investors interested in supporting the equitable growth of small businesses across the state, including IBank, Santa Clara County, San Francisco County, Wells Fargo, First Republic Bank, Bank of America, the Grove Foundation, The Kapor Center, the Panta Rhea Foundation and generous individual donors. The most recent backers of the Fund are The Doctors Company, Sonen Capital, Visa Foundation and others.

“We are excited to work with the California Rebuilding Fund to enable equitable access to capital for historically underserved small and micro businesses as they recover and rebuild,” said Graham Macmillan, president of the Visa Foundation. “We believe the Fund’s approach of providing patient and affordable financing to small business lenders who understand the challenges of the local market will help small business growth and long-term resilience. “

Many eligible small businesses

Community Lenders participating in the Reconstruction Fund offer a standardized loan on low cost, transparent and flexible terms to small businesses with loans of up to $ 100,000. Businesses that have received funding from the State Pandemic Grant Program or other relief fund are still eligible to receive a low-interest loan from the Reconstruction Fund.

“By the end of 2020, I was out of options,” said Alicia Villanueva, owner of Alicia’s Tamales Los Mayas, a catering and food processing facility in Hayward, Calif. “That’s when I heard about the California Rebuilding Fund. I applied through a participating lender, Pacific Community Ventures, and was one of the first small businesses in the state to receive a loan. The loan came at a crucial time for us, and we used the funds for payroll, reinvested some in the business, and reached new customers.

Free advice and support

All interested small business owners should submit a pre-application to www.CALoanFund.org, which will collect standard information about their business and connect them with a community lender. If it matches, the lender will help business owners with the application and provide free advice and support through a network of organizations organized by CAMEO (The State of California Micro-Business Network ), Small Business Majority, California Small Business Development Centers, and Women’s Business Centers. .

“The California Rebuilding Loan has been an essential product for small California businesses on the road to recovery as we weather the effects of the pandemic,” said Susan Lamping, vice president of CDC Small Business Finance, one of the 12 participating communities. lenders. “It gives our business community access to much-needed capital as they rebuild and regain ground, and it allows lenders to increase our loans to support our community of entrepreneurs as they grow. get back on their feet. “

The fund is managed by Kiva Capital Management and organized by Calvert Impact Capital.

“Under the strong leadership of Governor Newsom, the California Rebuilding Fund was established and is one of the many tools available to help small businesses adapt to their new operational reality,” said Dee Dee Myers, director of the office. of the governor for business and economy. Development (GO-Biz). “Small businesses and innovative start-ups now have access to free resources and technical assistance to start, manage, grow and prosper through the new website of the California Office of the Small Business Advocate. “

Small businesses can learn more about other help available for small businesses in the California Small Business Fact Sheet.

The Community Reinvestment Fund’s Connect2Capital platform hosts applications at www.CALoanFund.org.


Source link

Comments are closed.