Economic Development
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CARES Act Revolving Loan Fund
The purpose of the CARES Act Revolving Loan Fund (CARES Act RLF) is to provide economic assistance to City of San Diego or City of Chula Vista businesses impacted by the COVID-19 pandemic. The loans are intended to help entrepreneurs adapt their business models to operating under pandemic restrictions and changing safety guidelines, thereby promoting economic resilience and job retention or creation. Loan consideration will be given to qualified small businesses based on the availability of funds. Qualified businesses must meet program guidelines and underwriting criteria and submit all required information and supporting documentation. The CARES Act RLF is being administered by the City of San Diego Economic Development Department.
Businesses operating in the City of San Diego’s or City of Chula Vista’s low- and moderate-income areas or businesses classified as part of the region’s base sector industries will receive priority and expedited service in the loan process. (Base-sector businesses are those that make, sell or offer products or services to customers primarily OUTSIDE the San Diego region.)
The submission of an application is no guarantee that a business will receive a loan.
Total Loan Fund
$1,620,000 from the CARES Act Revolving Loan Fund
Loan Amounts
Generally, $25,000 to $95,000 per qualifying business (Other amounts may be considered.)
Interest Rate
3% annually
Eligibility
Only one CARES Act RLF loan is available per business or owner.
To be eligible, a business must meet the following minimum requirements:
- Employ 1 to 250 Full-Time Equivalent (FTE) employees at time of application
- Have at least one (1) FTE on payroll NOT including business owner(s)
- Be located in the City of San Diego or City of Chula Vista, with loan funds to be spent at that location
- Have a valid City of San Diego Business Tax Certificate or City of Chula Vista Business License as of Jan. 1, 2019
- Not be a home-based business
- Not be part of a franchise or chain
- Not be a lobbying, lending, investment, or insurance company; a golf course, racetrack, or gambling facility; or a business engaged in performances or sales of products of a prurient sexual nature
- Not be a nonprofit organization
- Have been operational (with documentation) by Jan. 1, 2019
- Be able to provide proof of economic hardship (i.e., show at least a 20% decline in 2020 business revenue compared to 2019) due to the COVID-19 pandemic
- Show positive 2019 net income and the sustainment of at least 25% of pre-pandemic revenue in 2020
- Have monthly business debt service/business revenues ratio less than 30%, with “revenues” referring to 2019 average monthly sales
- Have no more than one 60-plus-day delinquency and no charge-offs in 2020
- Have no delinquencies of any kind in 2019
- Have no bankruptcies in the past three (3) years
- Have no repossessions or foreclosures within past three (3) years
- Have no outstanding tax liens and judgments
- Not be engaged in any illegal activity per local, state or federal regulations
- Be able to start repaying the loan six (6) months after the issuance of the loan
- Have each owner with at least a 20% stake meet the following qualifications:
o Reside in California
o No bankruptcies in the past three (3) years
o No repossessions or foreclosures within past three (3) years
o No outstanding tax liens and judgments
o No unpaid child support
Requirements
As part of the preliminary online application, the following documents must be submitted along with a credit check authorized for the business and each owner with at least a 20% stake:
- Complete list of business owners, and each owner’s percentage of ownership and tax ID number (e.g., SSN, TIN or EIN)
- Copy of Driver’s License or other government-issued ID card for each owner
- Alien ID card and current utility bill for non-citizen owner(s)
- 2019 and 2020 Federal Business Tax Returns
- 2021 Profit and Loss Statement
- Self-Reported Credit Score (printout or screenshot) for lead applicant or owner with the largest stake
If deemed eligible, each applicant will then be asked to provide the City of San Diego’s underwriting team with the following documents/information:
- Personal financial statements for each owner with at least a 20% stake
- Balance Sheets for the business, before and during the COVID-19 pandemic
- Schedule of Liabilities for the business
- Profit & Loss/Income Statements for the business, before and during the COVID-19 pandemic
- Bank Statements for the business
- Anticipated payout for Loss of Business, Business Interruption or similar coverage from a business insurance policy
Permitted Uses
Loans generally may be used only for equipment and working capital required to adapt the business model to operating under pandemic restrictions. Refinancing of a portion of Payment Protection Program (PPP) loans may be considered when such refinancing will contribute to economic resiliency and job creation or retention.
Interest Rate
3% annually
Loan Fees
Loan origination fee of $100 plus 1.0% per loan that may be included in the financed amount
Repayment
No payments and no interest accrued for first six (6) months, with loan terms generally ranging from 54 to 78 months, depending on the uses of the loan.
Examples
The table below is provided for illustration only and does not guarantee a particular set of loan terms and payments amounts.
| Loan Conditions | Sample Business A | Sample Business B | Sample Business C | Sample Business D | Sample Business E |
|---|---|---|---|---|---|
| Loan Amount Disbursed | $25,000 | $35,000 | $50,000 | $80,000 | $95,000 |
| Loan Origination Fee: $100 + 1% | $350 | $450 | $600 | $900 | $1,050 |
| Total Financed Amount | $25,350 | $35,450 | $50,600 | $80,900 | $96,050 |
| Interest Rate | 3% | 3% | 3% | 3% | 3% |
| Loan Term (including period of no payments) | 54 months | 60 months | 66 months | 72 months | 78 months |
| Number of Loan Payments | 48 | 54 | 60 | 66 | 72 |
| Estimated Monthly Payment Amount | $561.11 | $702.61 | $909.22 | $1,331.19 | $1,459.35 |
Loan Closing
If approved for a CARES Act RLF loan, the applicant will be required to complete, sign and submit the following loan documents, at a minimum:
- Commitment Letter
- Loan Agreement and Promissory Note
- Personal Continuing Guaranty for each business owner with at least a 20% stake
- EFT Vendor Enrollment Payment Form
- IRS Form W-9 for the entity receiving the loan proceeds
These documents, as applicable to the business structure, will also be required:
- Fictitious Business Name Statement with the County of San Diego Recorder/County Clerk (i.e., “doing business as/dba” statement), if applicable
- Partnership agreements, partnership bylaws, buyout agreements and authorization to borrow, if applicable
- Articles of Incorporation, Corporate Bylaws, and Corporate Resolution to Borrow, if applicable
Disbursement
After all completed loan documents are received and executed by the City of San Diego, the net loan proceeds will be disbursed electronically within 20 business days.
Application
A sample initial application is available for your review prior to applying online. (
Sample Application PDF)
To start the CARES Act RLF application process, please click the following button and complete the brief interest questionnaire.
CARES Act RLF Interest Questionnaire
Funding for this program is provided through the U.S. Department of Commerce Economic Development Administration.