Nov. 30—Small businesses in Lodi will now have the chance to apply for as much as $50,000 in loans through a new microloan program.
The City of Lodi announced this week that it has launched the Hometown Microloan Program in partnership with Sacramento-based nonprofit California Capital Financial Development Corporation.
The program will offer low-interest loans to small businesses in Lodi with less than 10 employees.
"This new source of lending offered by the Lodi City Council is intended to provide a path forward to greater economic growth for startups and small businesses based in Lodi who have experienced hardships in obtaining capital," City of Lodi business development manager Astrida Trupovnieks said.
Trupovnieks developed the program over a 12-month period by consulting with lending institutions in Lodi, regional nonprofit microlenders and community development nonprofits.
While any businesses that meet the borrowing criteria can apply, the loans are specifically designed for first-time and low-income borrowers, as well as businesses owned by minorities, veterans and women.
The city said the partnership with California Capital FDC — which provides loans to businesses that have been denied funding from traditional sources — will be instrumental in providing long-term financing support for Lodi's increasing number of small businesses.
"California Capital provides complementary business advising as part of the loan application process, ensuring that the applicants are prepared to manage their business and finances effectively," said Robert Gonzales, Director of Lending at California Capital.
He added that business owners will also have access to ongoing, no-cost advising after receiving a loan.
Loans will have a fixed interest rate of 5%, which the city said is well below the current prime market rate.
The terms are made possible by the city, which will buy down the interest rate from 9.75% in addition to paying all loan fees.
Trupovnieks said both entities are optimistic the program will be a success.
"Plans are already underway to expand funding for the program to increase the number of businesses assisted in the future," she said.
For more information, visit www.cacapital.org/loans or www.lodi.gov/484/economic-development.