May 10, 2022 | Today, the California Infrastructure and Economic Development Bank (IBank) celebrated a new COVID-relief milestone — more than 10,000 jobs have been created or preserved for Californians operating or working at small businesses throughout the state since April of 2020.
Created through a $50 million investment by Governor Newsom, IBank’s COVID-19 Micro Loan Guarantee initiative gives lenders the confidence they need to lend to small- and microbusinesses that otherwise struggle to access capital at a time when they need it most.
“Creating or retaining ten thousand jobs at the smallest of California’s small businesses is significant,” said IBank Executive Director Scott Wu. “IBank’s COVID-19 Micro Loan Guarantee initiative is not only helping small businesses keep the lights on and the doors open, it’s helping the owners and employees persevere through a dark and difficult time and emerge on the other side of the pandemic.”
In partnership with California’s nonprofit Financial Development Corporations and lenders statewide, IBank — housed within the Governor’s Office of Business and Economic Development — to date enabled California’s smallest businesses to access more than $92 million in approved loans.
“These are the moments you feel like your work matters; like you’re making a difference. Especially when you consider these businesses average five or fewer employees,” said Megan Hodapp, manager of IBank’s Small Business Finance Center. “IBank couldn’t do it without our Financial Development Corporation partners and the lenders who use our loan guarantees. They make all our work possible.”
Broad, inclusive outreach, largely aided by California’s mission-driven, community development financial institutions (CDFIs) ensured expanded access to the program, including access for underserved populations and underserved communities. Approximately 86% of the loan guarantees are serving small businesses owned by females or minorities or that are located in low- to moderate-income areas.
IBank’s loan guarantee programs have been incredibly successful with low rates of default, a testimony to the efficacy of the program. As a result, lenders are building confidence in small businesses’ ability to pay back loans that help those businesses start, grow, and thrive.