Sonoma County microlending program receives $1 million in new funding
An innovative Sonoma County lending program for small businesses has received $1 million in new funding to help local entrepreneurs, especially those still grappling with the fallout from the 2017 wildfires and recent floods.
The Sonoma County Economic Development Board has received an $800,000 federal grant for its microlending program, which has been in operation for almost four years. That money comes from the Department of Commerce’s Economic Development Administration as part of the 2018 budget bill to help areas across the United States recover from natural disasters.
“As we continue to rebuild from the tragic October fires, we must ensure our community is better prepared to weather future disasters,” said Rep. Mike Thompson, D-St. Helena.
Those funds will be paired with a $200,000 matching grant from the Tipping Point Community Foundation in San Francisco, said Al Lerma, the board’s director of business development and innovation.
The $1 million in new funding should help make 50 loans available and create 175 jobs.
“These funds will provide loans to small businesses who may not otherwise qualify for traditional financing to support recovery and expansion efforts,” said Ben Stone, the board’s executive director.
Only about 30 percent of eligible businesses were able to get U.S. Small Business Administration-backed loans in the aftermath of the wildfires, Stone said. Meanwhile, traditional bank lending is harder to obtain because underwriting standards were tightened in the aftermath of the Great Recession.
Popular local shops such as the Nectary in Sebastopol and Bow N Arrow Clothing in Cotati have used the microlending program to grow their businesses. The program is administered by Working Solutions, a community development financial institution, and makes low-interest loans up to $50,000. Before the recent grants, the program had raised $2 million.
Barrio, a Mexican restaurant in the Barlow area of Sebastopol, recently used the program to start its business. The restaurant was closed for more than a month after the recent west county flooding, but was able to get a deferral on its loan payments while it recovered, Lerma said.
You can reach Staff Writer Bill Swindell at 707-521-5223 or firstname.lastname@example.org. On Twitter @BillSwindell.