San Diego County supervisors will vote Tuesday on whether to establish a $5 million recovery loan program, partnering with the San Diego Foundation, for small businesses operating in unincorporated areas.
County Supervisors Dianne Jacob and Jim Desmond, the authors of the proposal, said the funds would help businesses get the resources they need during the public health crisis.
The county would direct The San Diego Foundation to use the money to fund loans up to $50,000 for businesses with 50 or fewer employees, with an interest rate not to exceed 2% and a max two-year loan term.
The county's fund will come from the General Fund balance. Applications that provide job retention and creation will have a higher chance of receiving funds, according to the proposal.
The county's loan program proposal comes after similar programs were implemented in the cities of San Diego, San Marcos, Poway and Coronado.
Coronavirus and Economy
The $5 million fund, if passed, would also be the first contribution to a recently announced San Diego County COVID-19 Small Business and Nonprofit Loan Program (SBNLP), a public-private partnership formed by County Supervisor Nathan Fletcher and The San Diego Foundation.
The program will provide no-to-low interest loans for businesses financially impacted by the pandemic. The program can access available disaster recovery loans with approved 95% guarantees on the principal, Fletcher announced.
It is anticipated a variety of local governments, philanthropists and other entities will contribute to this fund, Fletcher said.
For loans over $50,000, SBNLP collaborators plan to use philanthropic and subordinate funds to leverage additional, low-cost funding available from community development financial institutions (CDFI) and other local banking institutions.
“We designed this program to allow public and private entities to donate money that our strategic partners can leverage using their technical expertise, staff capacity, balance sheets and resources to rapidly inject liquidity into the local San Diego County small business sector," Fletcher said.
The loan servicing will be managed through CDFI institutions Accion San Diego and LISC San Diego, The San Diego Foundation, and Mission Driven Finance.
Other finance partners include the California Southern Small Business Development Corporation, and San Diego & Imperial Small Business Development Center (SBDC).