Los Angeles Mayor Eric Garcetti on Wednesday, March 18 announced an $11 million economic relief package for small businesses impacted by the novel coronavirus (COVID-19).
“Small businesses are the backbone of our economy, and we’ll do everything possible to help them survive this crisis,” said Garcetti. “This program will offer the support they urgently need to be in a better position to stay in business, retain employees, and thrive again when we get past this very difficult moment.”
As part of the program, which was approved by the Los Angeles City Council, the Economic and Workforce Development Department will provide $11 million in no-fee microloans of $5,000 to $20,000 — which may be used to cover working capital.
Since cash flow is critical at this unprecedented time, the program will offer relaxed underwriting with no credit score minimum, a generous allowance to meet debt service, and a 100% Loan to Value ratio. The interest rate can either be 0% for a term of six months to one year, or 3% to 5% for a term of up to five years.
“Small businesses across the city are already taking a significant hit from this crisis,” said Councilmember Paul Krekorian. “This motion allows these businesses to access loans that can keep them functioning over the next critical weeks and months.”
The microloan program is being paired with a Small Business Resilience Toolkit, which is being distributed as a digital guidebook and includes vital information covering Federal, State, County, and City emergency policies and programs impacting small businesses.
It also offers strategies for adjusting to the effects that COVID-19 is having on businesses — including ways to keep employees safe, maintain operations at maximum possible capacity, and prepare business continuity plans.
The application process for a microloan and the toolkit can be found at lamayor.org/loan.