A New Hope For Small Businesses: Santa Clara County’s Loan Program

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Courtesy of Advantus Media

Santa Clara County’s loan program aims to help rebuild small businesses during the pandemic.

Rithvik Kalyanker

Due to the current pandemic, many small businesses have closed their doors, leaving many people jobless. To help these small businesses, Santa Clara County launched a new loan program aimed to support small businesses. This offers a low-interest plan of up to $100,000 for the businesses that qualify for it. 

This program, proposed by Santa Clara County Supervisors Joe Simitian and Susan Ellenberg, provides three or five-year term options with a 4.25 percent interest rate for small businesses with 50 or fewer full-time employees. Furthermore, qualifying businesses also require under $2.5 million in revenue during 2019. “These funds are available now and are relatively easy to apply for,” Simitian said. “I know people are hurting, and these funds are a step in the right direction.”

According to CBS SF Bay Area, this program is designed to provide financial support at amazing speeds. The loan applications are either approved or denied within a span of three to four weeks. The program is possible because of a partnership with the state entity, California Rebuilding Fund, which facilitates loans to local small businesses. The Santa Clara County Board of supervisors voted five to zero unanimously to partner with the California Rebuilding Fund. Through this partnership, the County Board hopes to provide as much as $100 million in loans to small business owners. “I’m pleased that the Board of Supervisors has taken the next steps in support of a $100 million dollar small business loan program,” said Simitian. “These small businesses are the backbones of our communities, providing employment and economic stability for hundreds of thousands of residents across the county. They are hurting desperately right now.”

According to the County of Santa Clara, on November 30th, Governor of California Gavin Newsom announced that an additional $12.5 million of funding would be provided to the program, increasing the lending power of up to $125 million for many small businesses throughout the county. Furthermore, Simitian states that he would try to push for additional investment as of January 22, 2021. He also noted that the rapid funds allow money to be “loaned, again and again, multiplying the impact of the county’s participation over time.” When recycled, this investment of county dollars could eventually fund $100 million. 

CEO of the non-profit organization, Accion Opportunity Fund, Luz Urrutia, claimed that this fund program would be especially beneficial to people of color and those who have been left behind by the federal relief efforts. “Small businesses have been the driving force behind every economic recovery, including leading the way out of the Great Recession,” Urrutia said. “They can do it again, but not without an intentional effort to reach and support them.” 

According to The San Jose Spotlight, “Leaders of the Silicon Valley Organization, the South Bay’s largest business networking group, want supervisors to go for the whole other $100 million to create the loan program. The SVO also advocates for breaking up loans into smaller amounts,” furthermore, since we live in a high cost-of-living region. The rent, operating costs, and salaries, are inflated in Silicon Valley. Ten thousand dollars per business may not make a difference. That could easily be only one month’s rent, maybe a little more. 

The intent of this program is to help as many small businesses that have been severely hit by COVID-19 as possible. “COVID-19 has been an economic body blow for our county’s small businesses and their employees,” said Simitian. “Using the State’s California Rebuilding Fund’s infrastructure, and working with local CDFIs that understand our community’s needs, prevents duplicative efforts and streamlines the process to get help to local businesses and their employees as quickly as possible.” All these steps are being taken in order to help small businesses and restore the country’s economy. If the county takes action today, we can retain jobs, sustain businesses, and eventually re-develop the economy we had before COVID-19.  

Ever since the pandemic, small businesses have been suffering, thus resulting in a fall of not only California’s economy but the overall country’s economy. Plans like Santa Clara’s loan program can significantly raise the country’s economy and help the owners and employees of the businesses pay their fees and rent.