SANTA ANA, Calif. – Small Business Development Corporation of Orange County has launched a new loan program aimed at aiding Southern California small business entrepreneurs who are located in underserved areas.
The corporation during the first week of February began offering direct loans between $2,000 and $10,000 from its new Entrepreneur Loan Fund, or ELF, to small business owners of low wealth or who are located in low-wealth communities.
“We recognized that many entrepreneurs struggle to find that first seed money to truly get their businesses off the ground,” said Michael A. Ocasio, President and Chief Executive Officer of Small Business Development Corporation of Orange County. “Small business owners in communities of greater need that are not serviced by traditional lenders find it particularly difficult to obtain funding. SBDC-OC is striving to fill that gap by offering these entrepreneurs a product that will enable them to start, grow, and sustain their businesses.”
Loan qualifications require that an applicant be a California-licensed small business with 750 employees or less or one that is in the process of becoming licensed in California. An applicant must be a low-wealth entrepreneur or located in a low-wealth community or disaster area. A low–wealth community is a community located in a county within California with a per capita personal income equal to or less than 115% of statewide average per capita income, and a city or unincorporated area within such county with an unemployment rate equal to or greater than the statewide average unemployment rate. A low-wealth individual is defined as a business owner(s) with annual income equal to or less than the statewide average per capita income.
Entrepreneur Loan Fund loans must be used in California for specific purposes including start-up costs, machinery, inventory, tenant improvements, and program loan fees.
ELF loan terms are up to 5 years, fully amortized with fixed interest rates tied to Wall Street Journal Prime Rate + 5.0%. Program fees are 3.0% of the loan principal amount. Funding evaluations are reached within approximately one week of the submission of an application. An online application and application checklist are available on SBDC-OC’s website at www.sbfdoc.org or can be accessed by calling 714-571-1900.
The Entrepreneur Loan Fund was initially capitalized internally by a $100,000 contribution from SBDC-OC. It is supported through City National Bank’s $10,000 loan loss reserve grant, and Farmers & Merchants’ $2,500 grant to establish and support a loan loss reserve. Ocasio stated that the SBDC-OC aims to raise $1 million for a revolving pool of funds.
ABOUT SMALL BUSINESS DEVELOPMENT CORPORATION OF ORANGE COUNTY
SBDC of Orange County (http://sbfdoc.org) is a quasi-public/private 501(c)(3) not-for-profit public benefit corporation, which operates under the state’s public municipal bank, The California Infrastructure and Economic Development Bank (iBank). SBDC of Orange County is not affiliated with the U.S. Small Business Administration.
The corporation, established in 2001, is a mission driven organization dedicated to assisting small business owners secure operating capital through its capital access programs including California’s State Loan Guarantee Program, Export Lines of Credit, bond conduit and Green Energy Initiatives to support small business access to credit.