This morning Michelle Steel, Orange County Supervisor, gave District 2 of Fountain Valley $900,000. The check came before tonight’s city council meeting where the city’s small business loan program was discussed. Fountain Valley has decided to exhaust the grant funds before initiating the loan program.
Michelle Steele’s $913,000 grant
Michelle Steel gave District 2 of Fountain Valley $913,000 Tuesday morning. This grant put a wrench into the Fountain Valley Small Business Loan Program due to interference with applications and regulations.
Michelle Steel and OC Supervisor Donald Wagner had received $26 million from the CaresAct after proposing $101 million in CARES Act Funding for a Business Recovery Program.
“Each supervisor got 15 million to distribute. Michelle Steel gave her population share to each city in her district. She gave $913,000 in Fountain Valley to distribute with the directive to grant to small businesses, not a loan, a grant from the federal government,” Houston said.
How this affects the loan program
Due to the grant funding received this morning the Fountain Valley Small Business Loan Program will be used a back stop for when grant funds run out.
“The plan is to mirror the same requirements and specifications for the loan program, but get approval to hold back on the loan program and insert grant funds and use them first,” Houston said.
Houston reflected that the grant will provide money to small businesses that they don’t have to pay back and businesses should apply to that first.
Fountain Valley is split into two districts. Michelle Steel’s District 2 and Andrew Do’s District 1. The border between the districts lies on Warner.
Businesses under Michelle Steel’s district will have access to the grant program.
Currently Supervisor Do has not allocated any funding to his district in Fountain Valley.
Fountain Valley’s Small Business Loan Program
Fountain Valley formulated a Small Business Loan Program after CaresAct funding was slow to be distributed.
Rob Houston said, “We’re worried about how can we help small businesses in the city. We want to make sure we keep the heart-blood of our city. If they do well,we do well. It’s the right thing to do.”
The Small Business Loan Program will allocate $500,000 to Fountain Valley small businesses. Businesses would be eligible for up to $10,000 at a 2% annual interest rate with a three-year term.
Eligibility for the loans include sales being down more than 25%, layoffs due to Covid-19, coronavirus contraction in the workforce, 25 or fewer employees and have an active Fountain Valley business license for six months.
Businesses also must not have received funding from the Fountain Valley Covid-19 Emergency Small Business Employee Retention Grant.
The loan would cover operational costs such as payroll, rent and utilities.
The Federal CaresAct had allocated dollars to cities that were distributed through the county level. Waiting on funding from the county, Fountain Valley started planning a small business loan program of their own to help launch the local economy.
The funding comes from Fountain Valley’s Economic Development Fund which currently has $1.5 million dollars and the loan program would request $500,000.
“The CaresAct was supposed to go to cities and was held up at the county level. We we’re worried that the clock was ticking so a loan from the general fund for our economic development, we felt, was a way to get money out quickly,” Fountain Valley City Manager Rob Houston said.
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