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HomeMy WebLinkAboutAgenda - 03-24-20; 6-a - Approval of Emergency Small Business Funding Program 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 24, 2020 Action Agenda Item No. 6-a SUBJECT: Approval of Emergency Small Business Funding Program DEPARTMENT(S): County Manager ATTACHMENT: INFORMATION CONTACT: Bonnie Hammersley, (919) 245-2300 Travis Myren, (919) 245-2308 PURPOSE: To provide Emergency Small Business funding to Orange County small businesses experiencing revenue loss due to the coronavirus pandemic in the form of both grants and loans. This program will be funded using Article 46 Sales Tax revenue that was originally budgeted in the Small Business Loan Program. The current balance in the Article 46 Small Business Loan Program is approximately $300,000. BACKGROUND: The coronavirus pandemic has impacted the global stock markets and disrupted economic and business growth throughout the United States. The County is committed to supporting its local businesses and has established various grants and small business loan programs to facilitate economic development. Given the substantial financial impact on small businesses from this pandemic, a new Emergency Small Business Funding Program is intended to provide immediate financial assistance. The BOCC previously approved Article 46 Sales Tax funding for the Small Business Loan Program which will be used to fund the Emergency Small Business Funding Program. Eligible small businesses may apply and qualify for either a grant, loan or both. An evaluation committee composed of two representatives each from the Small Business Grant Committee, the Agricultural Grant Committee, and the Small Business Loan (SBL) Board will make final determinations for both grants and loans. This group will be staffed by the County's Chief Finance Officer and Director of Economic Development. Following BOCC approval, this group will develop a plan to begin issuing grants and loans between April through June 2020. County staff will provide status reports to the Board. Eligibility requirements: - Orange County based businesses - Minimum of one year of operations - For-Profit business status - Profit and Loss statement indicating profitability prior to coronavirus pandemic Emergency financing program: - Maximum grant of $5,000 per small business with no repayment required. - Maximum loan of $20,000 per small business, according to the following terms: 2 o Businesses will be required to provide tax returns. The maximum loan and grant combination available to a small business will be limited to three months of fixed operating expenses. o Loans will be repaid over a five (5) year term. No payments will be due during the first six months of loan origination. o No interest will be changed on loans. o Small business will agree to an auto-draft process for loan payments. FINANCIAL IMPACT: The Emergency Small Business Funding Program is funded using funds originally authorized in the Article 46 Sales Tax Fund for the Small Business Loan Program. Approximately $300,000 is available in this account. These funds will be used for the express purpose of making small business loans and grants to eligible businesses. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs, and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends the Board approve the creation of the Emergency Small Business Funding Program and marketing of this program on the County's website, press release, and social media outlets to communicate available financial support to small businesses impacted by the coronavirus pandemic. The Manager further recommends that an Emergency Small Business Funding Program Committee composed of two representatives each from the Small Business Grant Committee, the Agricultural Grant Committee, and the Small Business Loan (SBL) Board make final determinations between April through June for both grants and loans and that County staff provide status reports to the Board.