Fund to provide $15 million in fixed rate loans
The California Rebuilding Fund, a loan program designed to target select small businesses across the state, is accepting applications through Nov. 15 with the goal of doling out $15 million.
The new funding reopened the program for this latest round of applications. The round will end earlier than expected if the available money runs out. To date, the program has distributed nearly $80 million.
The California Rebuilding Fund is a public-private partnership that provides low-interest, fixed-rate recovery loans to businesses with 50 or fewer full-time employees and less than $5 million in annual gross revenue. The fund targets small businesses in “economically disadvantaged and historically underbanked” areas of California.
Michael Weintraub, owner of Tarzana-based online women’s fashion discounter AfterRetail, received a $100,000 loan from the program in April.
Weintraub, who was previously limited to purchase orders of $5,000 to $10,000, said he was able to double that amount and “step into the big leagues” with Nordstrom Rack and other discounters, which, according to him, will help his business to recover.
“I’m a little guy. I feed from the same tank as these guys, but I’m more selective in what I buy,” he said. “Having this loan has allowed me to enter an arena where I otherwise wouldn’t be able to compete. I make bigger purchases with a designer that I could never approach because they don’t want to deal with smaller people.”
The maximum loan amount is $100,000, or up to 100% of average monthly income for any three-month period from January 2019 to the date of application. The fixed interest rate is the Wall Street Journal prime rate plus 1%. The terms of the loan run for three or five years.
Funds from loans can be used for working capital, inventory, marketing, rent, supplies, and other uses. The money cannot be used to refinance loans with other community lenders, although it can be used to refinance high cost debt.