California’s Reconstruction Fund offers short-term, low-interest loans to help struggling small businesses during the coronavirus pandemic
California is home to more than four million small businesses. The pandemic has had the hardest impact on those belonging to minorities. Often they do not have access to traditional lenders. A public-private partnership of community groups, lenders, and government formed the California Rebuilding Fund to provide low-interest loans to help small businesses survive.
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“There’s no better bet than on a small business owner who, you know, pours their heart, soul, effort and time into making their business a success,” said Beeth Bafford, vice president. from Calvert Impact Capital, one of the partners in the state-funded program.
A total of $50 million has been raised so far to make short-term loans of up to $100,000 which are to be repaid in three or five years at an interest rate of 4.25%. A key provision is that only interest is payable in the first year.
Deanna Sison is an entrepreneur who had three small businesses before the pandemic with 30 employees. Two of her businesses have closed as she focuses on running the Little Skillet restaurant with a reduced staff of seven.
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“It’s their families, it helps them keep their jobs and have the means to survive and put food on the table, which helps our neighborhoods and helps the wider community. For me, that’s my motivation,” she said.
A loan from Opportunity Fund helps her weather the pandemic. Pacific Community Ventures says mentoring is just as important as lending capital.
“Imagine your city without your favorite restaurant or your favorite shops, your main street,” said Bulbul Gupta of Pacific Community Ventures. “So keeping Main Street businesses alive during this crisis is also part of keeping our communities alive.”
The California Rebuilding Fund has already started receiving what it expects will be thousands of loan applications.
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