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To help small businesses, Santa Clara County supervisors propose $100M loan program

Plan seeks to collaborate with community partners such as nonprofits, credit unions

Restaurants begin to open for lunch service in downtown Palo Alto on May 14. Photo by Magali Gauthier.

Update: A proposed $100 million loan program was approved by the Board of Supervisors on Tuesday, Oct. 20. The County Administration is scheduled to come back with a report outlining program options during budget hearings in mid-November.

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Santa Clara County Supervisors Susan Ellenberg and Joe Simitian are proposing a $100 million loan program that would provide low-interest loans to small businesses negatively impacted by COVID-19.

If the proposal is approved at Tuesday's Board of Supervisors meeting, County Administration will come back with a report outlining program options during budget hearings in mid-November.

"COVID-19 has been an economic body blow for our County's small businesses and their employees," said Simitian. "These businesses are the backbones of our communities, providing employment and economic stability for residents across the county."

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Since the shelter-in-place orders in March, small businesses have had to either totally or temporarily close their doors as they faced losses, layoffs and bankruptcy.

In fact, the county's largest city, San Jose, ranks fifth in the country with the largest number of small business closures. For every 1,000 businesses, nine are permanently shut and 11 are temporarily closed, according to Yelp data.

California is also the state with the largest number of business closures — about 19,000 have permanently shut down and nearly 20,000 are temporarily closed, according to Yelp data.

"Throughout this health crisis, we have all made great sacrifices for the health and safety of our communities. Our small, local businesses are no exception," Ellenberg said.

The supervisors noted that small business owners have exhausted their support options, and with lack of state resources and unlikelihood of federal aid, the county would need to support the "lifeblood of county communities."

However, administrating a loan program will not be an easy feat for the county, as it doesn't have significant spending capability or experience/expertise in administering this type of program. Supervisors noted that working with like-minded community partners like credit unions, community banks and nonprofits would help address their shortcomings.

Local financial institutions could shape and implement the loan program and county partners could potentially subsidize the loan program as well, the supervisors said.

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To help small businesses, Santa Clara County supervisors propose $100M loan program

Plan seeks to collaborate with community partners such as nonprofits, credit unions

by /

Uploaded: Mon, Oct 19, 2020, 2:35 pm
Updated: Fri, Oct 23, 2020, 1:01 pm

Update: A proposed $100 million loan program was approved by the Board of Supervisors on Tuesday, Oct. 20. The County Administration is scheduled to come back with a report outlining program options during budget hearings in mid-November.

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Santa Clara County Supervisors Susan Ellenberg and Joe Simitian are proposing a $100 million loan program that would provide low-interest loans to small businesses negatively impacted by COVID-19.

If the proposal is approved at Tuesday's Board of Supervisors meeting, County Administration will come back with a report outlining program options during budget hearings in mid-November.

"COVID-19 has been an economic body blow for our County's small businesses and their employees," said Simitian. "These businesses are the backbones of our communities, providing employment and economic stability for residents across the county."

Since the shelter-in-place orders in March, small businesses have had to either totally or temporarily close their doors as they faced losses, layoffs and bankruptcy.

In fact, the county's largest city, San Jose, ranks fifth in the country with the largest number of small business closures. For every 1,000 businesses, nine are permanently shut and 11 are temporarily closed, according to Yelp data.

California is also the state with the largest number of business closures — about 19,000 have permanently shut down and nearly 20,000 are temporarily closed, according to Yelp data.

"Throughout this health crisis, we have all made great sacrifices for the health and safety of our communities. Our small, local businesses are no exception," Ellenberg said.

The supervisors noted that small business owners have exhausted their support options, and with lack of state resources and unlikelihood of federal aid, the county would need to support the "lifeblood of county communities."

However, administrating a loan program will not be an easy feat for the county, as it doesn't have significant spending capability or experience/expertise in administering this type of program. Supervisors noted that working with like-minded community partners like credit unions, community banks and nonprofits would help address their shortcomings.

Local financial institutions could shape and implement the loan program and county partners could potentially subsidize the loan program as well, the supervisors said.

Comments

Paul Brophy
Registered user
Professorville
on Oct 19, 2020 at 4:33 pm
Paul Brophy, Professorville
Registered user
on Oct 19, 2020 at 4:33 pm
4 people like this

The story doesn't say (and I don't think it's the reporter fault) just who will provide the $100 million, and who will absorb the inevitable credit losses. There's really no story here until these pesky details are answered.


resident
Registered user
Stanford
on Oct 20, 2020 at 10:57 am
resident, Stanford
Registered user
on Oct 20, 2020 at 10:57 am
5 people like this

I would be willing to donate to a non-profit organization that would give grants and loans to small businesses to help them through this time. I trust Supervisor Simitian to do a good job at oversight - hence, I hope he seeks out donations as a potential source of revenue. I would donate to an organization that had good oversight, and encourage the Palo Alto Online to continue to follow this story. I will be watching for more news.


Dick D.
Registered user
Crescent Park
on Oct 20, 2020 at 4:49 pm
Dick D., Crescent Park
Registered user
on Oct 20, 2020 at 4:49 pm
Like this comment

I would certainly hope we can find a means of helping our struggling or already sunk small businesses such as the many, independent restaurants that are on the edge or have already gone over and just can't make it.

I have two concerns – as LOANS how in blue blazes are they ever going to be paid back by businesses that in the best of times operate with a very thin margin. How can paying back a loan big enough to keep them going be done?

The other concern I have is that no matter what we're told from some of the federal government's political side, the science side says this virus is going to be with us for a looong time and economists are saying it'll be at least out till 2021 or 2022 or even later before our economy is back on its feet. So, how are these businesses going to get the customers with cash they need to survive even in the best of times. Case in point is the absence of people now working at home or Stanford people who fill up our restaurants at lunch . . . when are they coming back? With ever increasing numbers of unemployed and ever decreasing use of bricks & mortar, where is the customer money going to come from. With the next wave and winter on its way is the recent, seemingly increasing customer traffic going to be caught up in more stay-at-home?

Big problems – loans that have to be paid back and an environment with decreasing revenue for those that can keep their doors open. We're not alone with the USA and the whole World. The infection rate for the country continues to grow. These problems are going to get worse.

The loan problem also is faced with the federal effort to support airlines with insufficient fliers and thus less demand for new aircraft, and on and on with most other businesses, while building deficits our great grandchildren and their children are going to be trying to payoff.


eileen
Registered user
College Terrace
on Oct 20, 2020 at 8:31 pm
eileen , College Terrace
Registered user
on Oct 20, 2020 at 8:31 pm
1 person likes this

"Resident", I agree with you! I would also donate to a non-profit organization (that we can trust) that would give grants and loans to "established" small businesses to help them through this time. Many, not all of us, spend money on unnecessary things every day. Maybe we can try and save the small retail and restaurants that make our city liveable! It takes a village!

Oh, my, "Dick" you are so filled with gloom and doom! Yes, this virus will be here for some time, but we can listen to Anthony Stephen Fauci, and do everything possible to protect ourselves. My husband, 78, and I, 73 go out every weekend for lovely dinners "OUTSIDE", at local restaurants. Let's support local businesses, safely!.


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