New Initiative Looks to Support Smallest of California Small Businesses
The Governor’s Office of Business and Economic Development (GO-Biz) today announced the California Rebuilding Fund, a new public-private partnership that will leverage government backed capital to support California’s small businesses – especially the smallest under-served firms and entrepreneurs from communities that have been historically disenfranchised.
The initiative was approved yesterday during the California Infrastructure and Economic Development Bank’s (IBank) August board meeting. Prior to the approval, the State of California allocated $25 million and new statutory authority to IBank to enable a collaboration with the state’s private sector. This public-private partnership will in turn drive capital to Community Development Financial Institutions (CDFIs) and other mission-based lenders that provide much-needed loans to California’s underbanked small businesses. With the support of this new IBank funding, California’s CDFIs increase their capacity to help small businesses recover and reposition themselves to survive the realities of the COVID-19 marketplace.
“Businesses across California have been devastated by COVID-19 and our smallest businesses have been the hardest hit,” said Governor Newsom. “Ensuring that these businesses have access to capital will help jumpstart economic growth in communities across the state and provide needed support for entrepreneurs working hard to keep their doors open.”
The California Rebuilding Fund is the latest program supported by the State of California aimed at helping the state’s smallest small businesses in response to the COVID-19 crisis. Additional small business support by the State includes:
“IBank’s Board of Directors approved this initiative to address a vital part of the California economy, by helping under-served small businesses adapt to the ‘new normal’ and seek long-term solutions for ensuring success,” said Scott Wu, IBank’s Executive Director.
“Now more than ever small businesses need access to capital and this innovative new public/private partnership program will assist those small businesses with needed funds to survive and thrive,” said California State Treasurer Fiona Ma.
“Across multiple industries, COVID-19 has fundamentally changed day-to-day business operations. Small businesses have been highly impacted, yet they persevere and embrace change finding new ways to pivot and survive in this marketplace,” said Isabel Guzman, Director of the CalOSBA. “By supporting our network of mission-based lenders, this funding will build a public-private partnership to help save California’s beloved Main Streets and preserve the small businesses that define our diverse communities.”
“The pandemic has left 30 to 40% of California's small businesses on the verge of failure. To prevent a wave of closures, small businesses need access to affordable and responsible capital. However, due to large gaps in available capital and a system designed to naturally favor well-connected businesses, many of the smallest and most diverse businesses in our state are at risk of being left behind,” said Mark Herbert, Vice President, California at Small Business Majority. “If our economy is to recover, we must bridge this divide. Small Business Majority strongly supports this investment in the California Rebuilding Fund and applauds the IBank for taking action to ensure that small businesses have the resources they need during this time of crisis.”
“If we do not act quickly and intentionally, this multi-layered crisis may wipe out an entire segment of California’s economy – very small businesses. Often owned by immigrants and entrepreneurs of color, these businesses provide critical jobs and services in communities across our state,” said Luz Urrutia, CEO, Opportunity Fund. “The California Rebuilding Fund is a vital piece of the solution – leveraging public support to unlock private capital from banks and other investors. This effort will enable mission-based lenders like Opportunity Fund to provide financing and advising to entrepreneurs to restart, regenerate and rebuild California’s Main Street economy.”
The COVID-19 pandemic and efforts to mitigate the spread of the virus have presented extraordinary challenges for California’s small businesses. Small businesses across the state have stepped up to protect their employees and customers with innovations that meet the moment.
The Governor’s Office of Business and Economic Development (GO-Biz) serves as the State of California’s leader for job growth and economic development efforts. GO-Biz offers a range of services to business owners including: attraction, retention and expansion services, site selection, permit streamlining, clearing of regulatory hurdles, small business assistance, international trade development, assistance with state government, and much more. For more information visit, www.business.ca.gov.
The California Infrastructure and Economic Development Bank (IBank) was created in 1994 to finance public infrastructure and private development that promote a healthy climate for jobs, contribute to a strong economy and improve the quality of life in California communities. IBank is located within the Governor’s Office of Business and Economic Development and is governed by a five-member Board of Directors. IBank has broad authority to issue tax-exempt and taxable revenue bonds, provide financing to public agencies, provide credit enhancements, acquire or lease facilities, leverage State and Federal funds and provide loan guarantees and other credit enhancements to small businesses. Find more information: www.ibank.ca.gov.
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