EUREKA ECONOMIC DEVELOPMENT & HOUSING

Small businesses are the backbone of our economy. They provide for 75% of all new jobs created. Yet, entrepreneurs often face difficulty in accessing capital through traditional lenders.

Without capital, jobs cannot be created. Without jobs, the community stagnates. The Revolving Business Loan fund works to break this cycle by providing access to necessary funding, and in return, creating jobs for our citizens.

Funding equipment, inventory, capital and more

Eureka Economic Development understands that many small businesses will encounter roadblocks when seeking expansion capital. When this occurs, the City of Eureka’s Community Development Block Grant Revolving Business Loan Fund can provide up to half of a project’s total financing need.

Funds can be used to finance:

• Inventory purchases
• Equipment acquisition
• Working capital / lines of credit
• Real property acquisition
• Furniture / fixtures

Secured loans can range from a minimum of $5,000 up to $50,000. The maximum amount may be exceeded on a case-by-case basis. However, loans above $50,000 will require additional approval by the State Department of Housing and Community Development.

Loan requirements

Eligible businesses must be a “small business” as defined by the Small Business Administration (SBA). The SBA has established the following small business size standard for most industries.

SBA small business limitations:

• 500 employees for most manufacturing and mining industries
• 100 employees for all wholesale trade industries
• $6 million for most retail and service industries
• $28.5 million for most general and heavy construction industries
• $12 million for all special trade contractors
• $0.75 million for most agricultural industries

To apply, applicants must submit a fee of $300 to cover loan processing costs (fee may or may not be paid with CDBG loan funds). All loans are subject to Redevelopment Advisory Board and Eureka City Council approval. When reviewing applications, particular attention is paid to small businesses and projects that have the greatest potential for long-term job creation and retention, especially jobs created and retained for economically disadvantaged workers.

Exclusions and limitations

Every loan granted loan must result in the creation and/or retention of at least one permanent full-time equivalent job for every $20,000 of funds granted.

All loans shall be fully secured by collateral, and no unsecured loans shall be made.

Types of collateral may include:

• Liens on real property
• Deeds of Trust
• Liens on machinery, equipment or other fixtures
• Personal and/or corporate guarantees
• Other collateral, as appropriate

The term of the loan is linked to the First Deed of Trust call, or a ten year maximum, depending on the asset being financed, the “financial gap” and the demonstrated need for the funds.

The interest rate is linked to the City’s current earnings on investments, as determined by City staff at the time of the loan commitment, and fixed for the duration of the loan.