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E.C. Business Owners Take Advantage of Microloan Program

EL CENTRO — For struggling business owners in El Centro, the possibility of receiving a $10,000 forgivable microloan through the city’s Community Block Development Grant program has materialized before them like manna from heaven.

On June 2, the El Centro City Council allocated $200,000 of the $333,375 the city received in CBDG funds for a microenterprise loan program intended to assist businesses prepare for and respond to COVID-19.

At its June 16 meeting, El Centro Economic Development Director Stacey Mendoza presented the details of the microloan program, which the council unanimously approved, immediately putting the program into action.

“The program requires participants to be low income. Currently the average (annual) median income for the Imperial County is $55,600. Qualified candidates for this program can only make 80 percent of that (or $39,150),” said Mendoza as she shared the eligibility requirements for the microloan.

To be eligible for a microloan, a business must have between one and five full-time employees in addition to the owner, as of March 17, Mendoza said.

“Businesses applying for the grants must be located in the city of El Centro and have a valid business license. Businesses must have been in operation for six months before the pandemic and provide proof of hardship due to COVID-19. Business must not have engaged in any illegal activity per local state and federal regulations,” said Mendoza.

If recipients have received any other federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding, they are not eligible for a for the grant, said Mendoza.

Mendoza clarified that microloans would not be available to lending and investment institutions, golf courses and gambling facilities, nonprofit entities, or chain stores.

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Once a microloan is approved, a business can use the funds to cover specific expenses.

“Business owners can use their money from their loan for operating capital for staff salaries, or lease of space, purchasing inventory supplies, computer programs for accounting, and inventory control, or furniture fixtures and equipment,” said Mendoza.

“Businesses cannot use their funding to pay expenses from prior loans, payment of non-business debt, personal expenses, or supporting of other businesses the borrower may have interest in,” Mendoza said.

The terms for the microloan include a stipulation in which the loan could be forgiven under certain conditions.

“Loans of up to $10,000 will be given to applicants with low-interest rates based on credit score with no loan fees or prepayment penalties. The loan is eligible to be forgiven if the borrower retains a full-time job for six months or if the sole proprietor of business remains in business for six months in El Centro,” Mendoza said.

The application process for the microloan is extensive but the city has tasked the Small Business Development Center to assist business owners in completing the application.

The owner will be required to complete a five-page document explaining how they will keep their business safe during the pandemic. “The owner must certify they received cleaning and disinfecting recommendations from the Emergency Operations Center,” Mendoza said.

A total of 20 businesses will be able to participate in the program.

The city had received four applications as of June 16, one of which was rejected for the program because the business had already received emergency funding.

“We have had seven or eight applicants for the grant the last time I checked. I cannot disclose the names of the businesses who have applied for or received the grant,” Mendoza said June 22.

Holtville City Council Moves to Utilize SBDG Funding

One of the items on the June 22 Holtville City Council meeting agenda was the Small Block Development Grant. Holtville has not decided on its CBDG program but at the last council meeting, members voted to allow city employees to develop a plan to get Holtville business owners access to SBDG funds. Holtville’s plan will be presented to the City Council at its July 6 meeting.


This story is featured in the Jun 25, 2020 e-Edition.

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