Small businesses are the heart and soul of Berkeley, offering high quality goods and services that reflect our gourmet palates and eclectic tastes - and are infused with the love, care and expression of local owners. The economic crisis COVID-19 has provoked has the potential to decimate our local economy. While the Federal government and State promise some relief, we are also acting quickly to support this sector at the local level.
As a first line of defense, the City Council put $3M into an emergency relief fund for small businesses, arts organizations and renters, the Berkeley Relief Fund. An additional $1M has been raised through community donations, supporting a full $4M in grants to cover covid-related losses. We received over 1000 applications from small businesses - far exceeding our ability to help every worthy and deserving applicant, and awarded grants to over 352 businesses and 47 arts organizations.
Looking forward, we must pursue all possible measures to provide relief to our small business sector and help rebuild the local economy. That’s why I partnered with the Haas Business School at UC Berkeley to propose the Save our Small - SOS - Business Loan Fund. The loan fund, which would be a first-in-kind of the proposed model, seeks to pool private and public funds in a way that expands capital available for small businesses and makes very low interest rates possible for borrowers.
The City takes on risk for its relatively small portion of loaned capital, but its participation as a quasi-guarantor in the loan pool attracts investors who might not otherwise participate in lending to small businesses.The City, on the other hand, reaps all of the long term benefits of the investment of a larger pool of capital to support loans to local businesses, in the form of a rebuilt tax base.
My SOS Business Loan item, co-authored by Mayor Jesse Arreguin, was passed by the City Council as an urgency item on April 14,2020. City Economic Development staff are already working in partnership with Haas professors and staff to create this new and promising model for very low interest loans for our struggling businesses.
- Sophie Hahn
Vice Mayor & District 5 Councilmember