County forgives $750,000 in COVID business loans

EL CENTRO — The funds used in the two phases of Imperial County’s COVID- 19 Businesses Stabilization Lending Program for small business will not have to be paid back.

The Imperial County Board of Supervisors on Tuesday forgave $ 750,000 in loans to 77 businesses that applied and were accepted into the lending program.

On May 12, the supervisors approved the first phase of the lending program to businesses impacted by COVID- 19 with $ 500,000 in low- interest and forgivable loans for about 50 small businesses.

The interest on the loans was set at 2 percent for two years.

The loans were to be forgivable in cases where companies could demonstrate the funding was used to maintain or recall their previous workforce.

Now, all the loans will be forgiven to all of the businesses, regardless of employees’ status.

Of the 47 applications, 30 were eligible for loan forgiveness with most of them being given the maximum amount of $ 10,000.

On Sept. 15 the supervisors approved the second phase of the Imperial County Business Stabilization Lending Program with another $ 500,000 available. As with the first phase, the funding comes from solar projects under the Public Benefit Program.

The businesses awarded loans in the first phase were not eligible in the second phase.

Thirty applications were approved for $ 295,000, and of the 30 applicants, 16 had their loans forgiven.

The second phase allowed county employees in non- management roles to apply for loans, which was not allowed in the initial phase.

Of the 31 applicants who would have had to pay back the loans, some had no employees and relied on volunteers while others are solo proprietors with no employees.

County CEO Tony Rouhotas Jr. asked the supervisors to forgive the loans for all 77 applicants due to the fact the region’s economic recovery will take longer than anticipated due to the continued impacts of COVID- 19.

The loans that were forgiven went to businesses like restaurants, flower shops, newspapers, fitness centers and churches.

Supervisor Jesus Eduardo Escobar said the need is evident.

“I still think there is a lot of need, but a lot of people were not interested in loans,” he said.

He added the county should institute a sunset clause on when businesses can apply.

Rouhotas said there are more than 200 businesses that can apply for the remaining $ 200,000 in loans.

This forgiveness of the loans was on Supervisor Chairman Mike Kelley’s list of items he wanted to accomplish in 2021.