Written by Nicholas Vetrisek
Due to COVID-19, the City of San Marcos has decided to launch a program to assist local businesses. The San Marcos City Council approved the initiative on March 24 with the goal of reducing the negative effects on local businesses.
The program is setting aside $3,000,000 from the city’s general fund reserves for short term business loans. While the program is designed to aid local businesses during the coronavirus crisis, there are still certain limitations:
- Loans up to $10,000 with 0% interest repaid within 180 days.
- Loans from $10,001 to $25,000, 1.5% interest if repaid within 180 days, 2.5% if repaid within a year.
- Loans from $25,001 to $50,000, 2.5% interest if repaid within 180 days, 3.0% if repaid within one year, 3.25% if repaid within two years. Priority will be given to businesses with 10 or more employees for loans between $25,000 to $50,000.
City officials hope to fund the loans within one week of receiving the applications. The repayment of the loans is also to begin within 120 days of a formal declaration by the city that the coronavirus crisis is over. In addition, the city’s website states:
“Loan recipients for amounts less than $25,000 will be required to execute a promissory note in a form satisfactory to the City in order for the loan funds to proceed. Loan recipients for amount ranging from $25,001 to $50,000 will be required to execute a loan agreement wherein they acknowledge that the City will have recourse to the Borrower’s personal assets to satisfy any outstanding balances in the event of a default. The City reserves the right to require a personal guarantee on loans less than $25,000 should it feel that is the best way to ensure that a smaller loan is repaid.”
The city also said that eligible businesses will be divided into three tiers, with tier 1 being highest priority and tier 3 is lowest. The requirements for each tier are:
Tier 1: Independently owned businesses located in San Marcos that have been mandated by government action or decree to close or significantly alter their business activity due to COVID-19.
Tier 2: Independently owned businesses located in San Marcos that can demonstrate that their businesses have been significantly affected by government action or decree but have not been ordered to alter business practices other than requirements related to size of groups in a single area and observing recommended social distancing.
Tier 3: Businesses that are located in San Marcos, are part of a national and/or regional franchise and have been mandated by government action or decree to close or significantly alter their business activity due to COVID-19.
The City of San Marcos has shown itself to be working in the interest of the community and is taking important steps in dealing with the pandemic. As a result of this program, businesses that are struggling due to forced closures can at least have some help in staying afloat. Businesses now have a safety net and the leadership of the City Council and Mayor Rebecca Jones are to thank.
For more information about the program, visit the city’s official website.
