SAN MARCOS — Famous for “Restaurant Row,” a number of breweries and a business-friendly atmosphere, the city is taking a proactive stance in helping small businesses impacted by the COVID-19 pandemic.
The San Marcos City Council approved a $3 million economic stimulus package, the COVID-19 Business Sustainability Program, during its March 24 meeting.
Mayor Rebecca Jones said the program came to light after discussions between City Manager Jack Griffin and Economic Development Director Tess Sangster. The city is in a position to use $3 million for the loan program from its General Fund Reserves, which was projected to be more than $30 million, according to the Fiscal Year 2019-20 budget.
So far, more than 50 businesses have applied for $1.7 million in loans, Jones said. However, not all of the $1.7 million has been approved, she added.
“It’s a short-term loan program,” Jones said. “We are in a place where we have some reserves. Investing in our community is very important.”
For San Marcos, there are three loan options for small businesses. The first loan is up to $10,000 with 0% interest if repaid in 180 days. The second is $10,001 to $25,000 with 1.5% interest to be repaid in 180 or a 2.5% interest rate for one year.
Finally, loans from $25,001 to $50,000 has 2.5% interest for 180 days, 3% for one year and 3.25% for two years. For qualifying businesses, the city will send a wire transfer within two business days, according to the city’s website.
Additionally, priority will be given to businesses with 10 or more employees, according to Jones, as the city is attempting to help residents and workers with receiving paychecks.
“We really want to keep people working,” Jones explained. “I think that’s one of the big parts of this actual programs. Many people don’t think about this, many of our small businesses and workforce live in San Marcos, about 30%.”
Stipulations of the loans, meanwhile, call for a promissory note for loans up to $25,000, while those between $25,001 and $50,000 are required to execute a loan agreement with the city. Also, the city has recourse against the borrower’s personal assets to satisfy any outstanding balances should a borrower default, according to the program outline.
Loans must be used to benefit the business physically located in San Marcos. The city has also established a tier system for consideration.
The first tier includes independently owned businesses mandated by government action to close or significantly alter their business activity. The second is independently owned businesses demonstrating significant effects from government action but have not been ordered to alter their practices other than gatherings and social distancing. Finally, national or regional businesses forced to close or alter their business activity due to the pandemic.
“We recognize the significant negative impacts of the pandemic on our local businesses, particularly our small and independent businesses whose owners and workers live right here in San Marcos,” Sangster said. “We are able to offer this program because our city built up our reserves through decades of sound fiscal management.”
Businesses must be physically located in San Marcos and not in residential areas or zoning districts. They must also have a valid business license and be current on any other government permits or certifications required, or have any outstanding fines or violations. At-home businesses do not qualify.
Applications must be filed before the city’s official declaration to the end of the local emergency or before the funds are allocated.
Meanwhile, in Vista, the City Council will the Economic Development Department is starting its Vista Economic Development Strategy (VEDS) Committee early to also serve as the Economic Recovery Taskforce, according to Andrea McCullough, the city’s communications director. “They’ll be meeting in a few weeks,” she added. “The city is reviewing business strategies at this time and we should have more information next week.”
San Marcos businesses can apply through the website or via email to Tess Sangster at [email protected].
For what’s open in San Marcos, visit the city’s webpage.
1 comment
Maybe loans of taxpayer funds should be fully collateralized and not dependent on a promise to pay.
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