VISTA — The complexities and stipulations with federal COVID-19 relief programs was too much for the Vista City Council to overcome to lend a financial hand to its small businesses.
During its April 28 meeting, the Vista City Council unanimously denied the proposed Small Business Emergency Loan Program for businesses with 20 or fewer employees. City staff brought forward, at the council’s request, a program making $500,000 available through the city’s Structural Deficit Reserve Fund.
However, the money was initially set aside to cover city operations during stressful economic times, according to Mayor Judy Ritter.
Additionally, the requirements for Vista’s plan required businesses to have been approved by one of the two federal programs — Economic Injury Disaster Loan (EIDL) Emergency Advance or Paycheck Protection Program (PPP) — through the U.S. Small Business Administration — and repaying the city within 120 days.
The council decided it would be against small businesses’ best interests to offer the program and creating more financial uncertainty, especially since the Vista program was designed as gap funding while businesses wait for federal funds to come through.
“Money from the federal government can’t be used to pay back this loan,” Councilwoman Amanda Rigby said. “This puts us in a higher position of default. This reserve fund is to get the city through this time.”
The PPP has come under fire after Congress made businesses with 500 or fewer employees eligible, which has led to many wealthy businesses, notably Shake Shack and the Los Angeles Lakers, to secure funds while many small businesses have been shut out.
On top of the initial $350 billion, Congress approved an additional $310 billion last week.
Instead of the loan program, Vista will aggressively engage in marketing efforts to support its businesses.
“I did really want to do something to help our small businesses,” Councilman Joe Green said. “I think our intent was good … but it’s just not practical to do. It’s not really effective. I want to do something effective. I do like the idea of marketing our local businesses.”