Dear Subscriber First Name,

As we move toward the end of 2021 and into a season of thanksgiving, we reflect on all that has transpired during the past very difficult year and a half and express gratitude for all the individuals and organizations whose contributions have allowed us to continue our mission of helping sustain the state’s economic foundation, its small business community.

Without the support of generous lending institutions such as City National Bank, Pacific Premier Bank, Comerica Bank and CIT Bank coupled with increased funding from California’s legislature, economic development goals would be unachievable and many business ventures that have been decimated by the Covid-19 pandemic would have had greater difficulty securing or accessing vital main street capital markets. We have now moved through our current fiscal year’s first quarter ending Sept. 30 with solid numbers and are looking forward to an even brighter future.

In addition to administering the California Infrastructure & Economic Development Bank’s capital access program, our own direct lending program continues to support entrepreneurs and small businesses. As of the end of September, micro-lending through our Entrepreneurial Loan Fund Program (ELF) which was established in 2018 totaled $575,000 with deployment of direct capital to 24 small business owners of which 80.0% were business owners of color, 55.0% were female, and 82.0% were in low to moderate income census tracts. 

Going forward, we anticipate additional opportunities through the federally funded State Small Business Credit Initiative (SSBCI) with funds expected to arrive during first quarter 2022. Meanwhile we are preparing our annual report which will provide details of our organization’s operational activities during fiscal 2020-21. 

We hope you enjoy reading a few of our success stories in this newsletter which open a window into the ventures and people impacted by our work. We look forward to collaborating with you in the future as together we further strengthen California’s economy by helping its small businesses, its most important asset.

Michael A. Ocasio, President & CEO

Jim’s Spot

Government Guaranteed R & R

R & R to most people means rest and relaxation. To first responders it means rescue and recovery. Rescue is when there is a chance to save a life. Recovery is when rescue doesn’t work and an all-out effort is unwarranted.

Financial first responders during the COVID 19 pandemic utilized government guarantees. The Payroll Protection Program from the Small Business Administration program provided over $792,735,759,244 to help small business keep their employees on their payrolls. As of October 3rd, $561,265,371,888, PPP loans have been forgiven. Total number of borrowers were 11,492,065. The SBA also responded with Economic Injury Disaster Loans that so far has totaled $280,431,856,244. Number of borrowers for the EIDL program totaled 3,833,252 businesses.

The SBA 7(a) loan program also responded with a guarantee increase to 90% of the loan amount as well as waiver of the guarantee fee. For the fiscal year ending September 30, 2021 the SBA 7(a) had a record year with total loan volume of $36,536,756,800.

The beginning of a new SBA fiscal year on October 1st also meant the end of many of the SBA rescue efforts. Guarantee percentages for the SBA 7(a) program have reverted to pre-pandemic levels and guarantee fees have been re-imposed. The State of California Infrastructure and Economic Development Bank (IBank) has stepped up with recovery triage.

Its flagship economic development tool, the Small Business Loan Guarantee Program (SBLGP) has increased its guaranteed portion from $1,000,000 to $2,500,000. With a maximum guaranteed portion of 80% and a guarantee fee on only 2.5% of the guaranteed portion, a SBLGP guarantee is cost effective and versatile for both lenders and borrowers.

SBLGP versatility allows guarantees to be utilized for either term loans or lines of credit. Amortization can be based upon the cash flow of the borrower and not use of proceeds. Ineligible components can be included in financing packages with a proportionate reduction in the guarantee percentage.

There is also a Disaster Relief Loan Guarantee Program available through IBank. Any business located in a DECLARED disaster area (COVID, wildfire, etc.) is eligible for a loan with a guarantee that could be high as 95%. In addition to being in a disaster area, the loan proceeds must be used to recover from significant actual physical damage or significant economic injury.

At some point, R & R will once again mean rest and relaxation.

Jim Ely, Loan Committee Chairman

We’d ♥️ to connect with you!

We see social media as a valuable tool to engage audiences in a conversation on the activities of Small Business Development Corporation of Orange County. By sharing who we are, what we do and our role in underserved communities, we hope to build closer relationships with the public and bring us closer to our valued resource partners.

We mainly communicate via Facebook, Instagram, Twitter and LinkedIn
– follow us and help spread our message, our handle is @sbfdoc