Monterey County to Create Emergency Microloan Fund for Local Small Businesses
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 COVID-19.
“There is a strong need for quickly accessible, small-sized loans to newer, smaller businesses affected by closures due COVID-19,” explains 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.”
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 5-year term, with payments deferred for up to 9 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 will be designed to facilitate rapid deployment of capital to businesses in need.
The County has approximately $661,000 in federal funds available for lending, which could help an estimated 25 businesses. The program is first come, first serve. The County wants to make sure that all businesses in the County can access these funds and has reserved funds for South County businesses that apply by May 15, 2020.
To be eligible for a microloan, businesses:
- Must be located within Monterey County.
- Should have between 2-10 employees.
- Should have annual revenues that do not exceed $2,000,000.
- Be an operating business, not a passive real estate entity
- Have been in business for a minimum of one year, and able to provide a 2018 Federal Tax Return and interim financial statements
- Must present a feasible plan to recover post-disruption.
- 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.To find out more about microloans or to apply, contact California Coastal Rural Development Corporation, which is managing this project at www.calcoastal.org or (831) 424-1099.