City Economic Development Revolving Loan Fund
The City Economic Development Revolving Loan Fund is designed
to encourage businesses to create jobs. The program loans up to
$35,000 for every full-time job created with the condition that 51%
of the jobs created be made available to low and moderate income
individuals.
Revolving loans are underwritten by Community Development Block Grant Program staff in consultation with Coastal Business Finance, a non-profit Small Business Administration (SBA) certified development company. The terms are tailored to the individual needs of each business. Generally, loans are made for
acquisition, furniture, fixtures, equipment, inventory, working capital
and permit fees. Loans for construction are discouraged due to the
extra cost of the mandatory Davis-Bacon wage. The interest rate is
set at prime plus additional points based on risk. Long-term loans of
15 to 20 years are available. Collateral and/or guaranty is required.
City of Lompoc Economic Development Revolving Loans include:
California Chrysler, Dodge and Jeep: This auto dealership was loaned $250,000 at 6.75% interest to be repaid over a seven-year period. However, if sales tax revenues exceeded certain benchmarks, the annual debt service payment would be “credited” by the sales tax generated.
Saletti's Restaurant: This business was loaned $354,606 at 7.25% interest with a 25 year amortization, to be repaid in 10 years. Funds were used for the acquisition of a commercial building for use as a restaurant.
