New small business loan option emerges

Posted at 5:07 PM, Feb 09, 2021
and last updated 2021-02-09 20:45:13-05

SAN DIEGO (KGTV) -- Small businesses in the cities of San Diego and Chula Vista have a new option when it comes to accessing cash to get through the pandemic.

The two cities are offering low-interest loans between $25,000 and $95,000 for businesses that need the money to adjust to the pandemic. The money could go to buying new furniture, equipment, web development or marketing.

"This product will be good for a lot of businesses that have a specific plan in mind for something that they need to change," said Elizabeth Studebaker, of the city of San Diego's economic development department.

Applying for the loans should be easier than the rush for grants and forgivable PPP loans, but there's a reason: the loans from the cities are not forgivable. Small businesses would have between 54 and 78 months to pay the money back, at 3 percent interest (typically, the rates are 7 to 8 percent). However, no interest accrues for the first six months.

The cities will prioritize businesses in manufacturing and innovation, international trade and logistics, military including defense, and tourism including conventions and visitors. In San Diego, businesses in undeserved areas will also be prioritized.

Businesses with up to 250 employees that have existed since Jan. 1, 2019 are eligible. They must qualify by showing at least 25 percent pre-pandemic revenue in 2020.