OCEANSIDE — The city is taking steps to implement a $3 million relief fund to help local, small businesses financially during the COVID-19 pandemic and resulting recession before the end of this month.
During a special meeting on April 1, City Council unanimously approved directing staff to put together a $3 million business relief fund ready for implementation and final approval in 21 days. The fund, proposed by Councilmember Chris Rodriguez with help from fellow Councilmember Ryan Keim, will be used to issue micro-loans ranging from $10,000 to $20,000 to help local, small businesses retain employees and stay afloat.
Many businesses have been forced to halt operation due to federal, state and local public health orders that target reducing the spread of COVID-19. The program will be open to businesses that can show they are experiencing economic hardship due to the pandemic and have been in operation for at least six months.
At the meeting, Rodriguez said COVID-19 has “unleashed an economic war” on the city and its small businesses. Rodriguez wanted the program to be implemented by April 15, but City Manager Deanna Lorson explained staff needs more time to put together such a program. Rodriguez suggested using recalled bonds, Measure X funds, grants, FEMA or other federal aid assistance and donations from the private sector as funding sources for the program.
“With $3 million we can help between 150-300 businesses,” Rodriguez said.
The loan terms would be 24 months — Rodriguez called them “Band-Aid loans” — with 0 percent interest the first 90 days that would increase to between 3 percent and 5 percent between the remaining loan time.
He also suggested priority be given to the businesses who have been in operation longest, veteran-owned businesses and businesses with more employees.
Those that would not be eligible include lending and investment institutions, insurance companies, golf courses, gambling facilities, nonprofits, chain stores, home-based business, businesses with more than 50 full-time equivalent employees as of Feb. 28 and businesses engaged in illegal activity per local, state or federal regulations with federal regulations taking precedence.
Many businesses impacted by COVID-19 have already applied for the Small Business Administration (SBA) disaster assistance loans, but Rodriguez said the processing of these loans won’t provide the “fast relief” Oceanside’s small businesses need.
“Businesses need cash and they need it now,” he said.
Organizations like the Oceanside Chamber of Commerce and Main Street Oceanside have offered help with pre-screening for this potential program, and the Oceanside Small Business Development Center has offered help with further SBA disaster relief loan applications.