LOS ANGELES (CBSLA) — The Los Angeles County Board of Supervisors Tuesday unanimously approved motion to establish a public-private relief fund for small businesses hurt by the coronavirus outbreak.
The motion, which was proposed by Supervisor Mark Ridley-Thomas, will involve combining county funds and those from private philanthropic groups and financial institutions to provide loans to small businesses.
“The relief fund should be designed as a public-private partnership, with county funds available to leverage additional private support to preserve the economic wellbeing of our communities,” the motion reads.
The $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress last month included the Paycheck Protection Program, or $349 billion in loans for small businesses, defined as those with less than 500 employees. The loan will be fully forgiven if the money is used for payroll costs, interest on mortgages, rent and utilities.
However, Ridley-Thomas argues that local small businesses have still not received that money and will need bride loans in the meantime to stay afloat.
The relief fund would include “bridge funding for small businesses likely to receive federal disaster assistance” and “low-cost working capital loans to maintain small businesses who may not qualify for federal disaster assistance.”
It would also provide loans to nonprofit organizations and small businesses who either provide essential services or are “transitioning from an existing model to provide essential services.”
The fund will start with an initial $12 million from the county. Ridley-Thomas says Goldman Sachs has pledged another $15 million, while Wells Fargo has pledged $1 million. It’s unclear how large the loans will be.
The motion directs the county CEO and the L.A. County Development Authority to establish the fund by April 21 and report back to the board by April 24.
The city of Long Beach announced Monday that it had already raised more than $1 million through a similar relief fund effort that included donations from residents, businesses and foundations. The money is going to providing microloans to small businesses, helping low-income and homeless residents pay for food and supplies and providing emergency funds to those who have lost their jobs.
Last week, the L.A. Department of Workforce Development, Aging and Community Service established a $500,000 fund to provide businesses with less than 50 employees with up to $10,000 in grants.
The Los Angeles County Development Authority is offering small businesses with recovery loans of up to $20,000 loans with a 2.44 percent interest rate and a five-year term.