82.1 F
San Fernando
Thursday, Mar 28, 2024

Small Businesses Get $15 Million From City

Some 20 businesses are already lined up to receive assistance from the new small business loan program administered by the Valley Economic Development Center, which kicked off October 15 after an infusion of $15 million from the City of Los Angeles. “You have businesses right now that are in a position to expand into new markets or new technologies but don’t have access to capital in order to buy that inventory or hire new people,” said Roberto Barragan, president and CEO of the VEDC. “This program targets businesses whose financing needs are not currently being met by the banks, whether it’s SBA backed or not,” he said. The program is not related to the Small Business Administration (SBA) loan programs, and is funded by the City of Los Angeles through a loan from the U.S. Department of Housing and Urban Development. With fees at market rates, loan amounts range from $50,000 to $400,000, with a projected average amount of $250,000, said Barragan. Among the first to receive a loan was Powerline Control Systems Inc., of Northridge, a maker of energy-efficient lights. The loan to Powerline for $220,000 is expected to create up to 107 jobs over the next three years and help the company further develop and market a product that uses wireless light sensors to dim or shut off lights in commercial and industrial locations, according to Chief Executive Marshall Lester. The company had been unable to receive a loan from a bank and badly needed the funds to test the product, produce it and sell it. “We’re here to fill the gap and help those who can’t get an SBA loan and can’t find access to capital anywhere else,” said Barragan. The program is designed to help offset the effects of the economic downturn and the credit crunch and can only be used to help create or save jobs. The funds cannot be used to buy commercial real estate, for example, Barragan said. Two restaurants, one in downtown L.A. and one in Hollywood have also been approved for loans of $200,000 and $150,000 respectively. The VEDC is reviewing about a dozen applications, said Barragan. The VEDC, in partnership with the San Fernando Valley Financial Development Corporation also administers the SBA 504 Loan Program and the State Loan Guarantee Program. The SBA 504 program allows small business owners to purchase an industrial or commercial building at below-market interest rates with a minimum of ten percent down payment or equity injection, and serves as a long-term financing tool for economic development within a community. As of September 30, 2009, and during its first year of operation, their Certified Development Company (CDC) has approved $7.3 million in SBA 504 2nd trust deed loans. As a result it ranked #17 out of 138 SBA lenders in Los Angeles and Ventura Counties, placing in the top 20 percent of all SBA lenders in the region. The total value of the commercial real estate projects assisted by the CDC was over $18.7 million during its first year. “Our commitment to assisting small business owners in conjunction with our strong lending partner relationships enabled us to make a positive impact on the county’s economy during these difficult economic times”, said Silverio Robledo, Business Development Officer for the SFV-FDC.

Featured Articles

Related Articles