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$50,000 provided to start- up beauty supply store in Noe Valley and organic granola company in the Mission
07/14/09 - Mayor Gavin Newsom today announced that the City has awarded the first two loans through the San Francisco Revolving Loan Fund (RLF). The loans will allow two, women owned, small businesses to open or expand their businesses in San Francisco – Bubbles & Shampoo, a beauty supply store / salon in Noe Valley and 18 Rabbits, an organic granola company in the Northeast Mission. Each business received a loan of $25,000 through the Revolving Loan Fund.
"Small businesses are the backbone of our economy, but like many in the nation, San Francisco small businesses are shedding jobs while consumer spending drops and bank loans and credit diminish," said Mayor Newsom. "Our small businesses are too important to fail - that is why we created the Revolving Loan Fund to boost and aid entrepreneurism with more loans and free resources. The loans are designed to bridge the funding gap experienced by many small companies who have viable business plans but are failing to access funds."
The RLF is an $800,000 city funded business loan program for small businesses that are: (1) located in San Francisco, (2) are not able to get a bank loan and (3) create/retain at least 1 full time job made available to a low/moderate income individual. The low to moderate income threshold equates to an individual making below $63,000, or a member of a family of 4 making below $90,500.
"Without the City of San Francisco's Revolving Loan Fund, I wouldn't have been able to successfully get my business off the ground," said Claudia Ricarte Souther, Owner of Bubbles & Shampoo. "I hope I can inspire other small businesses to learn more about this invaluable program."
Mayor Newsom initially announced the RLF in February 2009, as part of his Local Economic Stimulus Plan to address the underlying issue of the current crisis - the scarcity of credit. In April, the San Francisco Office of Economic and Workforce Development (OEWD) selected TMC Development Working Solutions, a non-profit lender based in San Francisco, to administer the RLF. The City seeded the fund with $800,000 in existing Federal funds from HUD.
The RLF loans are generally $5,000 to $25,000 but can go as high as $50,000. Loans have 4%-6% fixed interest rates over a 5 year term and can be used for working capital, inventory purchase, equipment purchase, startup costs, and tenant improvements. As a requirement of the loans, Working Solutions creates an entrepreneurial education plan for borrowers to complete after they receive a loan. Working Solutions also provides ongoing free technical assistance during the life of the loan. This increases the likelihood of success of the business and the repayment rate of loans made by Working Solutions.
Working Solutions is also leveraging an additional $1 million in private funds for a Bay Area loan fund. The Bay Area loan fund has slightly higher interest rates (6% - 10%), doesn’t have a job requirement and is open to businesses in 9 Bay Area counties. San Francisco businesses are also eligible for these loans, providing a total of $1.8 million in capital available to San Francisco businesses.
For more information visit Working Solutions web site: http://tmcworkingsolutions.org/microloans/sanfranciscorevolvingloanfund/
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