LANCASTER — The Lancaster City Council unanimously passed the Stand Strong business recovery loan program to assist small businesses affected by the COVID-19 pandemic with first priority to those businesses directly affected by the closures.
The loans will be between $5,000 and $20,000 per qualified business for a total expenditure of $2 million from Lancaster’s general fund reserve. The program will remain in effect until Dec. 31, or until funds are exhausted.
“The loan funds are intended to aid the businesses in business continuity throughout the pandemic as well as to recommence business operations once the pandemic is over,” Economic Development Manager Chenin Dow said during Tuesday’s City Council meeting, which was conducted via teleconference.
The loan program is intended to help local “mom and pop” and locally owned independent businesses whose primary business operation is located within Lancaster city limits.
Priority will be given to the hardest-hit businesses forced to close under mandates by Gov. Gavin Newsom and Los Angeles County as non-essential businesses. Newsom mandated the closure of all “non-essential” businesses until further notice, while L.A. County issued the same mandate through April 19.
Eligible businesses must be independently owned with annual gross revenue that does not exceed $3.5 million. Businesses must also have been in operation in Lancaster for at least 12 months as of March 17. Other terms apply.
Businesses that receive a loan can select from one of two interest rate options. The first is zero-percent interest for six months to one year. The second option is a variable interest rate equal to the city’s portfolio yield for up to five years.
Businesses ineligible to participate in the program are smoke shops/cigarette stores, hookah lounges, pawn shops, payday lenders, liquor stores, adult entertainment enterprises, massage establishments, gambling establishments and home-based businesses.
Mayor R. Rex Parris gave Dow further direction before the vote.
“If any elected official seeks to get somebody a loan, you are to strike that loan from the list,” Parris said. “This can only work if it is administered according to the protocols we have set up. I do not want one person to think that they have a way to get to the head of the line. They do not. The only thing they have is the ability to be taken off the list. This has to be done absolutely fair and absolutely by the letter of the procedure set out.”
All of the loans will be public and available to view by anyone who is interested.
City Clerk Andrea Alexander read a comment from Diane Carlton, government affairs director for the Greater Antelope Valley Association of Realtors, in regard to the Stand Strong program.
“I would like to make sure that property owners, landlords, are considered as qualified businesses for purposes of obtaining a loan pursuant to the program guideline,” Carlton said. “Many landlords hold mortgages on property they are renting and are relying on the ability of their tenants to pay their rent in order to pay their mortgage, utilities and other expenses associated with maintenance of the rental property.”
Carlton added in light of new regulations prohibiting landlords from evicting tenants due to temporary non-payment as a result from the impact of the COVID-19 pandemic.
“While some landlords will be able to wait for the deferred rent to be paid at some point in the future, others this will be a greater burden and may impact their ability to stay current with any expenses associated with maintaining their rental property,” she wrote.
Parris said he would prefer not to amend the program as written.
“If we want to do something for landlords we should address that in a separate procedure. What I do not want is the landlords to be competing with small businesses for this,” Parris said. “It’s not a bottomless well and this is to keep the small businesses going.”
Vice Mayor Marvin Crist asked if the City Council could give City Mayor Jason Caudle the ability to meet with Carlton and come back with a proposal.
“I think that’s a great idea,” Parris said.
Councilmen Darrell Dorris, Ken Mann,and Raj Malhi agreed.