Update: A proposed $100 million loan program was approved by the Board of Supervisors on Tuesday, Oct. 20. The County Administration is scheduled to come back with a report outlining program options during budget hearings in mid-November.
Santa Clara County Supervisors Susan Ellenberg and Joe Simitian are proposing a $100 million loan program that would provide low-interest loans to small businesses negatively impacted by COVID-19.
If the proposal is approved at Tuesday's Board of Supervisors meeting, County Administration will come back with a report outlining program options during budget hearings in mid-November.
"COVID-19 has been an economic body blow for our County's small businesses and their employees," said Simitian. "These businesses are the backbones of our communities, providing employment and economic stability for residents across the county."
Since the shelter-in-place orders in March, small businesses have had to either totally or temporarily close their doors as they faced losses, layoffs and bankruptcy.
In fact, the county's largest city, San Jose, ranks fifth in the country with the largest number of small business closures. For every 1,000 businesses, nine are permanently shut and 11 are temporarily closed, according to Yelp data.
California is also the state with the largest number of business closures — about 19,000 have permanently shut down and nearly 20,000 are temporarily closed, according to Yelp data.
"Throughout this health crisis, we have all made great sacrifices for the health and safety of our communities. Our small, local businesses are no exception," Ellenberg said.
The supervisors noted that small business owners have exhausted their support options, and with lack of state resources and unlikelihood of federal aid, the county would need to support the "lifeblood of county communities."
However, administrating a loan program will not be an easy feat for the county, as it doesn't have significant spending capability or experience/expertise in administering this type of program. Supervisors noted that working with like-minded community partners like credit unions, community banks and nonprofits would help address their shortcomings.
Local financial institutions could shape and implement the loan program and county partners could potentially subsidize the loan program as well, the supervisors said.