Business Assistance Loan Program

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The West Covina Business Assistance Loan Program is designed to assist local businesses and create jobs. West Covina through the Community and Economic Development (CED) division will make loans available to businesses creating permanent jobs. The jobs created must be permanent full-time equivalent (FTE) and made available to low-and-moderate income individuals.  While its a loan program, the loans may be forgiven if the applicant has maintained compliance with the program guidelines during the 5-year loan term.

City is accepting applications from February 9 to March 30, 2017. 

For more information about the program please read the information below:

Program Documents

Program Guidelines

The Business Assistance Loan Program provides West Covina business owners a loan of a minimum of $80,000 to a maximum of $360,000. The loan amount is based on $20,000 per FTE job created. In addition, those hired will need to be low-and-moderate income individuals.

 Basic Requirements

  • $20,000 per permanent FTE created made available to low-and-moderate income individuals
  • Maintain FTE funded by loan per term of the loan
  • 5-year term. After year 5, if in compliance, loan will be forgiven
  • Create a minimum of 10 jobs
  • Business owner must provide matching funds
  • Demonstrate financial need
  • Run credit report through Experian (fee associated)
  • Provide collateral
  • Business must have office/storefront and the point of sale must be in the City of West Covina

Loan Application Processing

Applications will be accepted from February 9, 2017 until March 30, 2017.

This is an open enrollment, not based on a first-come, first-serve basis. Complete applications will be reviewed by a City’s Loan Committee and recommendations will be presented to the City Council for approval on May 2, 2017*. Applications are being accepted through the University of La Verne Small Business Development Center (SBDC) for review, and will then be reviewed and scored by the City’s Loan Committee (consisting of the City Staff and a SCORE representative). Scoring of the applications will be based on criteria (see criteria). Once the scoring has been made, the Loan Committee will recommend the pre-approved applications to City Council for approval/denial.

 *Date is tentative and subject to change.

Loan Underwriting

The City of West Covina is working with University of La Verne SBDC to underwrite the loans, as such applicants will need to sign up as clients of SDBC. There is no cost to join SBDC. A SBDC representative will work with applicants to complete the loan application package for submittal to the City. During this phase, the SBDC representative will not disclose any of the Borrower’s personal, confidential information as part of the underwriting process. However, the SBDC representative will provide the Loan Committee an analysis of the business’s credit worthiness.

University of La Verne SBDC Contact Information 

Phone Number:  (909) 448-1567     |     Website:   http://lavernesbdc.org     |     2180 3rd Street, La Verne, CA 91750

Applications

 

 

 

Applications can be found on the City’s website (www.westcovina.org). Please contact University of La Verne SBDC at (909) 448-1567 or http://lavernesbdc.org to sign up as a SBDC client, and to submit the West Covina Business Assistance Loan Program application.

Program Steps:

Step 1: Fill out application package and submit to SBDC

Step 2: Sign up with SBDC as a client

Step 3: Work with SBDC representative to complete application package

Step 4: Loan Committee reviews completed application package submitted by SBDC based on criteria

Step 5: Presentation on recommended applications to Council

Step 6: Execute loan documents and fund loan

Step 7: Monitor program for compliance during the 5-year term of loan

Dates:

  • February 9, 2017: Open Enrollment Starts
  • March 30, 2017: Application Deadline
  • April 17-May, 2017: Loan Committee Review
  • May 2, 2017: City Council Approval/Denial
  • May 2017: Execution of loan documents and funding of loan

*Dates are tentative and subject to change.

Depending on funding and applications, the City may re-open enrollment.

Criteria:

 Scoring of the applications will be based on the following criteria:

  • Financial Soundness (20 %)
  • Job Creation (20 %)
  • Business Plan (15 %)
  • Potential Economic Impact (15 %)
  • Owner/Operator Experience (10 %)
  • Owner/3rd Party Funding (10 %)
  • Quality of Life Impact (10 %)

Applications that score 80% or higher will be presented to the City Council. In addition, applications are subject to program funding availability.

Reporting Requirements

Applicants who receive a program loan will be required to provide a quarterly report to the City which monitors the number of jobs created for the program and the qualifying employees. The quarterly report to the City will be recorded each quarter for the 5-year loan term. 

Income Guidelines

Jobs created must go towards to low-and-moderate income individuals. Maximum income limits are below.  

Family Size

Annual Income

1

$54,450

2

$62,200

3

$70,000

4

$77,750

5

$83,950

6

$90,200

7

$96,400

8

$102,650

(Based on current effective median income of Los Angeles County. Revised annually as set forth in 25 Cal. Code Regs. Section 6932) As of May 24, 2016.

About SDBC

Small Business Development Center (SBDC) offices provide business owners and entrepreneurs a vast array of assistance from classes on a wide range of business topics (access to training, business counseling) to assistance in the development of small businesses. Programs and services the SBDC provides include business counseling, business planning, lease negotiation assistance, and financial packaging.

University of La Verne SBDC Contact Information 

Phone Number:  (909) 448-1567     |     Website:   http://lavernesbdc.org     |     2180 3rd Street, La Verne, CA 91750

Definition of FTE

Full Time Equivalent (FTE) Employee- For the purposes of this program, Full-Time Equivalent (FTE) is defined as forty (40) hours of paid full-time work in a seven-day period.

In the medical and dental fields, the industry practice defines full-time positions as 32 to 36 hours of work in a seven-day period. Therefore, the only exception to the forty hour definition of FTE position requirement will be for positions created in the medical and dental fields, when the written personnel policy of the participating business states clearly the number of hours that constitutes full-time positions as 32 hours or more.

Source of Funds

The City of West Covina Community Development Block Grant (CDBG) Business Assistance Loan Program is funded by the United States Department of Housing and Urban Development (HUD), by authorization of the Housing and Community Development Act of 1974, Title I, as amended, Public Law 93-383. The objective of the act is to develop viable urban communities, by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for person of low and moderate income.

As such, federal funds cannot go towards businesses that are not federally compliant (for example, a medical marijuana dispensary).

If you have any questions concerning the program please contact Karen Ko at (626) 939-8417 or email her at karen.ko@westcovina.org.

Additional Business Resources

 For further additional business resources, please visit Resource Guide for Business.

 

 

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