City Of LA Will Offer No-Interest Loans To Small Businesses Hit By Coronavirus
With the new coronavirus causing widespread economic disruption, the city of Los Angeles plans to offer a lifeboat to some small businesses in the form of low- to no-interest loans.
The city’s Economic and Workforce Development Department (EWDD) will offer $11 million in loans, ranging from $5,000 to $20,000 each, through the newly established Small Business Emergency Microloan Program.
Restaurants, gyms, retail shops and other small businesses who are seeing their customer base dry up can use these loans to pay for working capital expenses while they try to stay afloat.
The loans will be offered without interest for up to a year, or at 3-5% interest for up to five years.
To qualify, businesses must:
- Be located within the city of L.A.
- Have a good credit history
- Demonstrate that they have been affected by the coronavirus
- Show that their past profits are sufficient to pay back the debt
- Be aligned with the city’s broad goal of retaining jobs
EWDD General Manager Carolyn Hull said there’s no specific cap on how many employees a business can have in order to apply, though the program is designed to target businesses with around 20 employees or less.
“The loan amount is really to tide over those smaller companies,” Hull said. “We want to make sure those companies are able to rebound as quickly as possible when the current emergency has ceased.”
The loans will help anywhere from 550 to 2,200 L.A. businesses. Many more are likely to be affected, but Hull said the city’s program is meant to complement other funding sources, such as disaster loans coming through the U.S. Small Business Administration.
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