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Local business relief programs become critical as federal funds waver

As federal loan programs exhaust resources and politicians squabble over additional funding, businesses and nonprofits nationwide continue to struggle, making local relief programs even more essential for those looking to soften the blow dealt by coronavirus shutdowns.

“It has become much more important for businesses to turn to their localities for help,” said Long Beach Economic Development Officer Seyed Jalali. “It’s important to . . . keep them alive and help them as much as we can to stay above water and, hopefully, ride out this pandemic.”

The City of Long Beach established the Long Beach Emergency Loan Program several weeks ago by pivoting one of its established microloan programs to coronavirus relief. The fund has a budget of $800,000 and focuses specifically on businesses and nonprofits with five or fewer employees.

The program provides loans ranging from $2,500-$10,000 with a 2.44% fixed interest rate. The term of the loans ranges from five to seven years with payment deferment through Dec. 31. Real estate investment, brokers, insurance companies, chains and other similar businesses do not qualify for the loans.

As of Thursday, 52 applications have been received, according to the Long Beach Economic Development Department. Of those applications, 33 have been approved, 12 are being reviewed, two are incomplete and five have been declined. All approved loans have been for the maximum amount, with $280,000 already in the hands of 28 applicants.

“Without that $10,000 we would be closed. That was a huge game changer,” Little Brass Café Express owner Samantha Argosino said. “It bought us time to be able to operate, to be able to pay our employees, to buy inventory to sell to pay bills—it’s a very thin thread that we’re hanging on.”

Located at Long Beach Airport, Little Brass’s business directly reflects passenger numbers, which are down more than 90% at the municipal airport. Argosino said she has been able to keep her staff employed—with reduced hours and pay—by shifting the business model to a grocery service, selling goods for curbside pickup.

Argosino applied for every potential loan that she could and said dealing with the city’s economic development team was a positive experience, especially compared to other applications processes.

“They were fast. They were responsive,” Argosino said. “They called me right away and they said, ‘Hey, we’ve got this check. We can mail it to you or you can pick it up.’ Just to get that kind of concierge service . . . was such a huge blessing. We needed to pick it up because every day we’ve got new bills being paid.”

The U.S. Small Business Administration announced Wednesday that the $349 billion Paycheck Protection Program, a part of the CARES Act, had depleted its funds. In a joint statement, U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said the SBA has processed 14 years’ worth of loans in less than two weeks.

“The high demand we have seen underscores the need for hardworking Americans to have access to relief as soon as possible,” the statement read.

Los Angeles County began accepting applications Wednesday for $15 million worth of loans through the Goldman Sachs 10,000 Small Businesses initiative. The program received over 16,000 applications in less than 30 minutes, forcing the county to stop accepting them.

Funding for Long Beach’s emergency loan program dates back to 2001, when the city partnered with the National Development Council to create a microloan program and matched $1 million in seed capital from the U.S. Department of Commerce. Since then, the city has awarded nearly $5 million in small business loans.

The $800,000 budget is what was currently in the fund when it shifted to assist those impacted by coronavirus. Jalali said his department is proactively seeking additional funding for the emergency relief fund through the U.S. Economic Development Administration.

“Look at the composition of the businesses in Long Beach: 85% . . . are small businesses. They are really the backbone of our economy,” Jalali said. “We have an obligation as a city . . . to make sure our business community has access to affordable capital. It is important to keep these businesses alive.”

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