TITLE
Recommendation to authorize City Manager, or designee, to execute all necessary documents to amend the U.S. Economic Development Administration (EDA) Revolving Loan Fund, to create the Long Beach Emergency Microenterprise Loan Program to assist local micro businesses impacted by the COVID-19 pandemic during the emergency declaration period. (Citywide)
DISCUSSION
Consistent with goals of the 10-Year Blueprint for Economic Development, the City of Long Beach (City) operates several small business loan programs to help local small businesses at different stages of development to access the capital needed to start and grow their business in Long Beach. These City-run microloan programs are needed because many very small businesses are unable to meet the credit standards required to receive loans or lines of credit from commercial banks-particularly during economic downturns-and are considered high-risk by for-profit lenders.
Since 2001, the City has used funds from the U.S. Economic Development Administration (EDA) plus local matching funds to grow its Revolving Loan Fund (RLF) to assist local businesses in expanding and creating or retaining jobs. To date, the City has provided local small businesses with more than $5 million in loans resulting in the creation or retention of over 300 new jobs. To provide oversight of the program, the Loan Committee of the Economic Development Commission is responsible for reviewing and approving every application that receives funding. City Council last approved modifications to the EDA local RLF Administrative Plan (RLF Plan) in April 2015, which governs the administration of the RLF.
Given City Council direction to explore ways to provide more emergency loan assistance to local small businesses impacted by the COVID-19 emergency, staff have been working with the EDA and other partners to make its current loan programs more accessible, flexible, and responsive during this emergency period. The purpose of this recomm...
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