Modesto offering loans, other help to small businesses weathering pandemic
Modesto is helping small businesses walloped by the coronavirus pandemic by providing loans, deferring payment of city taxes, fees and utilities bills for 90 days as well as providing other assistance.
The City Council on Tuesday unanimously approved Modesto’s small business assistance program that officials hope will help businesses within the city ride out the the stay-at-home orders, social distancing and other measures taken to contain the virus but which have devastated the economy.
Community and Economic Development Director Jaylen French said in an interview that Modesto’s program complements the state and federal governments’ assistance programs.
Modesto will use $250,000 from its federal Community Development Block Grant funding for the loans. The loans are for two months of a business’s operating expenses or $10,000, whichever is less. The loans are for businesses with less than 50 employees.
The loans are low interest and can be forgiven.
Lenders, investment firms, insurance companies, nonprofits, chain stores and home-based businesses are not eligible for the loans, according to a city report.
French said Modesto is looking at how it can expand the loan program and help more of the city’s small businesses during a very difficult economic time.
Modesto is not the only local government helping business. Stanislaus County this month put in a place a $1 million relief program for small businesses, providing $10,000 microgrants for eligible companies.
Modesto also will defer for 90 days the payment of city fees and what it calls the mil tax. The tax is charged against a business’s gross receipts. The mil tax deferral is for businesses with less than $500,000 in quarterly gross receipts, fewer than 50 employees and are in good standing with the city over the payment of city taxes and utilities bills.
No payments for 90 days
Modesto has temporarily stopped disconnecting water and sewer customers, and it is working with utilities customers to set up payment plans. The report states the small business assistance program builds on that by letting small businesses defer the payment of their utilities bills for 90 days.
A business must have less than $500,000 in quarterly gross receipts and fewer than 50 employees to qualify for the deferral. Businesses that don’t qualify can work with the city to set up payment plans.
The city report says deferring the payments of taxes, fees and utilities bills “may create a short-term cash-flow issue” for the city but should not have a long-term impact. The report estimates deferring the mil tax could have an $800,000 short-term impact on the city. There was no estimate for deferring utilities bills.
Modesto also is working with its community partners on social media and other campaigns “to encourage residents and others to support Modesto’s small businesses during this time,” according to the report. Several initiatives have already started.
Businesses can learn about the city’s small business assistance program at modestogov.com/SBAP, which the city expects to have in place Wednesday. A link on how to apply for help is expected to be on the site by Thursday.
