GONZALES — Following the shelter-in-place order, the City of Gonzales mobilized its own financial resources to establish the Covid-19 small business bridge loan program.
The goal of the bridge loan is to assist small business owners while they wait to receive funds from state and/or federal small business assistance programs.
“Many small businesses are in need of funds to help them during this time of unprecedented challenges due to the coronavirus pandemic and the process to receive funds through other programs is moving very slowly. We needed to take quick and assertive action to support the small business community in our city,” said Matthew Sundt, community development director and building official.
The bridge loans provide up to $10,000 with a 1 percent interest rate. Under the City’s program, loan payments are deferred until Jan. 1, 2021, or deferred indefinitely if the business, (1) retains employees, (2) rehires laid off employees, or (3) if the owner is the only person working in the business, it allows the owner to retain the business.
If one of the above three criteria are met and the business owner agrees to work with the city’s economic development consultant to complete all loan requirements and develop a basic business plan by Jan. 1, 2022, then the loan will be deferred indefinitely.
By May 1 the City of Gonzales was able to provide 20 bridge loans and has dispersed $200,000 of city funds to support local small businesses.
The funds for the loan program came from existing Community Development Block Grant funds and Business Loan program income, and the City applied the same rules that were already in place for these programs to the bridge loan program.
In addition to the bridge loans, the City provided small business owners information about the Small Business Administration Loan Program, the Paycheck Protection Program and the various State of California initiated small business assistance programs available.
The City’s economic development consultant was also available to them to answer any questions about the City’s bridge loan, the variety of state and federal small business financial assistance programs and to assist them through the application process.