(Photo Credit: El Frito)
Cheers to you, San Francisco small business owners! It’s San Francisco Small Business Week, an annual event celebrating the vital economic contributions of the city’s more than 85,000 small businesses and entrepreneurs.
Proving he knows how to get a party started, San Francisco Mayor Edwin Lee kicked off this year’s festivities by announcing the creation of a loan program with $12 million available to lend to local small businesses.
“The Emerging Business Loan Fund will allow entrepreneurs and small businesses to secure the capital they need to innovate, grow their business and succeed,” said Mayor Lee.
By expanding financing opportunities for small businesses the new Emerging Business Loan Fund (EBLF) program aims to stimulate the local economy and fuel job creation.
Despite being a startup-friendly city, limited access to capital remains a large barrier faced by entrepreneurs across the state trying to kick-start and grow a business. Access to a steady and affordable stream of financial capital is a key decider in small business success. However, funding streams have dried up as compliance with stricter lending standards resulting from the economic downturn triggered banks to pull back from making small business loans.
In an effort to fill this lending gap, San Francisco’s new loan product creates an alternative funding pathway for entrepreneurs and small business owners left out of the traditional credit market.
To promote real job creation, the program prioritizes lending to nascent industries that have the potential to create employment opportunities for the city’s moderate to low-income population, such as apparel manufacturing.
Qualified businesses can apply for a loan ranging from $50,000 to $1 million to cover operational, staffing, equipment, expansion, and real estate costs.
“Based on recent demand from San Francisco businesses for this loan product, we know there is significant unmet need for flexible financing,” said Jacob Singer, Bay Area Small Business Finance CEO, the non-profit, community-based lender tapped to administer the program. “Our partnership with the City will enable us to get more loans funded that otherwise would not be financed.”
San Francisco created the loan program buy using existing funding from the Small Business Administration and the Department of Housing and Urban Development’s Section 108 program.
A robust small business sector is vital to the strength of any economy, but the health of small business depends on the availability of a reliable flow capital. Removing obstacles to obtaining financial capital, as San Francisco has done, will spur small business growth and reinvigorate the California economy.