Partnerships. New lending instruments. Wrap-around services. Equity for all. These are among the principles and strategies infusing the work under way throughout the state to rebuild businesses and local economies.
Details and guidance surrounding such efforts were shared during last week’s online workshop, “Best Practices for Business Resilience and Innovation Funds.” The workshop featured experienced practitioners from around the state who are working to help businesses that have been hurt by COVID-19 and the recession and to address racial and social inequities.
The workshop was one of five breakout sessions presented as part of Regions Recover Together, a virtual event hosted by California Forward and the California Stewardship Network last week. More than 500 people attended the overall plenary session, which broke into workshops to take a deeper dive into topics.
The goal of the breakout workshop on business funding was to share best practices on how regions are responding and rebuilding in real time, to describe regional strategies for economic planning aimed at redressing inequalities, and to think through ways to build a stronger, more equitable California.
“There are some remarkable practitioners across the state working on this very issue,” said Steve Frisch, president and CEO of the Truckee-based Sierra Business Council, who moderated the workshop. “There’s a real need for looking at new financing tools to facilitate recovery – both grant funding for small businesses and nonprofit organizations and new lending instruments.”
California’s 4.1 million small businesses are critical to the economy of the state, employing nearly half of the workforce, explained Isabel Guzman, director the Governor’s Office of Business and Economic Development (GO-Biz) Office of Small Business Advocate. Yet many struggle with limited cash flow and other challenges. The state is working hard to ensure that these businesses receive adequate “wrap-around services” to help them sustain operations, Guzman said. Regional approaches will be critical to those efforts, she added.
The challenges in increasing the number of “micro-loans” available to small businesses, including intensive labor requirements, inconsistent underwriting, and time-consuming manual systems, said Carolina Martinez, CEO at CAMEO, a statewide micro-business network. Thus, a significant focus has been expanding technological and online lending capabilities and moving members and services to online platforms to better serve “the small businesses that are suffering.”
Martinez and Guzman also noted an encouraging trend of increasing partnership and support from philanthropical organizations and various funding institutions, especially in remote rural communities with fewer available resources.
Following extreme wildfire events in 2017, the Community Foundation Sonoma County launched the Sonoma County Resilience Fund to serve a much needed “disaster philanthropy” role. When the pandemic hit, the local business community, concerned about the loss of workforce and other impacts, stepped up in a big way to raise funds for an emergency small business grant program. Through this effort, the Santa Rosa Metro Chamber, in partnership with the Foundation, was able to provide grants of up to $2,000 to numerous struggling businesses during a very short turnaround time.
“It provided a sense of hope in a very bleak time,” said Karin Demarest, vice president for community impact at Community Foundation Sonoma County.
In another community-based effort, the Ventura County Economic Development Collaborative is making a shift from remediating impacts to promoting reinvention and renewal, said Bruce Stenslie, president and CEO of Ventura County Economic Development Collaborative. The county currently is moving quickly to provide direct grants to businesses and rental assistance to low-income residents. These grant programs, however, also are serving as a springboard for “pivoting from recovery to renewal,” he noted. This broader and longer-term effort is focused on three target strategies:
- Shifting from reaction to innovation at the regional level and at the individual business level;
- Paying proactive attention to land use policies, such as transportation impacts related to greater tele-working, broadband deployment, and the accelerated trend away from traditional office space and brick and mortar retail; and
- Increasing policy attention to social equity and upward mobility to address the disproportionate impacts of the current crises on low-wage sectors and vulnerable populations.
Finally, Kristin York, vice president of Business Innovation at the Sierra Business Council, described the new “Resilience Fund – Sierra,” which is a place-based community impact fund that provides essential working capital to local business owners struggling to keep their operations going. The revolving loan fund raises capital through donations, as well as investments, and provides a way for local community members and business owners to invest in their own community.
“This is about keeping viable businesses viable,” York said. “It allowed us to address a huge need in the community.” She noted that the revolving nature of the lending program will enable the fund to continue into perpetuity and be used to solve other social equity and environmental resilience needs in the region, including housing, natural resource protection, forest health and wildfires, and health and social networks. More information about the fund can be found here.
A recording of the Best Practices for Business Resilience and Innovation Funds workshop can be found here.
To find more of our stories on the Regions Recover Together virtual event, click here.