OCEANSIDE — City Council denied spending one-time funds to start a $500,000 revolving loan program for businesses March 27.
Mayor Jim Wood, Councilwoman Esther Sanchez and Councilman Jerry Kern voted down the item.The idea was to provide $5,000 to $10,000 loans to new and existing businesses to help boost the local economy.
San Diego CDC Small Business Finance Corporation and the Small Business Development Center would determine whether applicants qualified. Then a revolving loan committee would give final approval.
The proposed program would provide micro loans for infrastructure improvements or working capital, gap financing loans, and target tenant improvement loans to create biotech lab space.
“I’m pretty excited about it for a number of reasons,” David Nydegger, Chamber of Commerce CEO, said. “Most banks will not touch loans under $25,000.”
Councilman Gary Felien also voiced support for the loan program.
“Businesses have had their finances cut off even though they have perfect payment records,” Felien said. “I support this going forward. We’re trying to create jobs.”
Sanchez said the city needs to be in a better financial position before a loan program can be considered. She suggested using the one-time funds to upgrade beach restrooms.
“Next year we’re anticipating a $1.7 million gap,” Sanchez said. “We’re not in the banking business. There is a way it can impact more people.”
Kern also opposed the idea.
“I don’t mind the concept, but philosophically I’m opposed to the city being in the banking business.”