In 2021, $87 million of American Rescue Plan Act funds poured into Solano County. Most of us remember the global pandemic wreaking havoc on our community and our economy, with nonprofits and small businesses suffering tremendously.
To address those hardest-hit by the pandemic — many of them people of color — the Solano County Board of Supervisors in 2022 approved $4 million ARPA funding to the Solano Economic Development Corporation (SEDC) to create the Solano Biz-Grow Revolving Loan Program for small businesses and nonprofits.
To cover the administrative costs, $400,000 is being allocated both to participating loan fund lenders: First Northern Bank, Valley Strong and Travis Credit Unions, and the SEDC. The remaining $3.6 million of the $4 million goes toward direct loans.
The significant feature of the loan program, said the SEDC, is that the “repayment revolves and small businesses and nonprofits in Solano County can be assisted in the future with loans from the repayment of the initial funds.”
Small business owners meeting the revolving loan program requirements can apply for a loan ranging from $25,000 to $125,000. If approved, they will receive a 6 percent fixed interest rate and a refundable $250 loan application fee if they complete an assessment and counseling with the Napa Solano Small Business Development Center.
All, however, is not well. Solano Black Chamber of Commerce President Tamuri Richardson and others in the community oppose the ARPA funding for revolving loans.
A change.org petition that has generated more than 100 signatures states that the “funds should be used for the betterment of our community and not for revolving loans that could potentially exploit vulnerable individuals and families.”
Small businesses should have access to ARPA funding in the form of grants rather than loans without heavy requirements, the petition continues. The petition calls on the participating banks to cancel their contract with the loan fund and put people before profits.
At a recent Solano County Board of Supervisors meeting, SEDC CEO Chris Rico and staff members Sean Quinn and Wendi Reed provided an update of the loan program to the Board.
After the SEDC’s presentation, Richardson, by phone, and two attendees expressed their disapproval of the revolving loan program during public comments. One of them stated that modifications continue to be made to the loan program terms. Supervisor Erin Hannigan rejected the accusation.
On the other hand, the Board heard favorable comments about the loan program that included a business owner, elected officials, Vacaville Chamber of Commerce president Debbie Egido, and Tri-City NAACP President Nikila Gibson.
The Board unanimously supports the revolving loan program.
I have attended Zoom meetings hosted by the Solano Black Chamber of Commerce discussing the loan program. Tri-City NAACP recently hosted Rico and two other staff members to explain the revolving loan program.
Rico said some small businesses have received grant money from other ARPA funding and the Paycheck Protection Program. This time, SEDC wanted to try something different.
The revolving loan program falls within ARPA funding federal guidelines.
Data found that 80-90 percent of people of color struggle more in their businesses, said Rico. As such, the SEDC prioritized minority businesses because they have the least access to inexpensive capital and had suffered most during the pandemic.
When the ARPA funds run out, the plan is to present the data and the program results to the Federal Economic Development Administration for additional funds to continue the program. SEDC plans to search for philanthropy funding, possibly from the Bay Area.
Another goal of SEDC is that small businesses and nonprofits build relationships with community banks and the Napa Solano Business Development Center. The business development center provides a variety of resources, services and business advisors — all free of charge — to help entrepreneurs develop and strengthen existing business skills.
Gibson said it’s better to have $125,000 spread out over more than a year than to have $10,000 at once. Also, with the revolving loan program, business owners can re-apply if they don’t qualify the first time.
As for the concerns of the revolving loan program, anything is possible. While local banks wouldn’t benefit long-term should they attempt to take advantage of small business owners, it’s up to organizations, like the local Chambers that represent small businesses, to hold the financial institutions accountable.
The Board has requested updates from SEDC. The community and, especially, Tri-City NAACP can also request similar information to help advocate for small business owners if necessary.
Small business owners and nonprofits are our neighbors and the job creators of America.
— Danette Mitchell is a social issues advocate and 2022 Women of the Year Congressional Award Recipient. E-mail: damitchell@earthlink.net