Half-a-million dollars in federal funds have been secured for small businesses in the Rio Grande Valley to help them through the pandemic, U.S. Rep. Henry Cuellar announced Friday in a virtual news conference.
A total of $550,000 has been allocated to the South Texas Development Council for small business loans in Webb, Zapata and Starr Counties to help keep their operations running.
“We have seen that this pandemic has hit all businesses,” Cuellar, D-Laredo, said. “… Everybody has been hit, especially the small businesses.”
Part of the fund — $50,000 — will go toward hiring someone to manage the loan program. The remaining $500,000 will be up for grabs for small businesses through the development council’s revolving loan fund. These available funds will continue to benefit other businesses as others pay back their loans.
Robert Mendiola and Juan Rodriguez, the executive director and program manager of the South Texas Development council, respectively, joined Cuellar in making the announcement.
Mendiola explained that these newly acquired funds are reserved for small businesses that have not been successful in securing monetary aid from other programs. These funds are more easily obtainable for small businesses now than before because the Department of Commerce has temporarily suspended several requirements.
“We are considered as a lender of last resort,” he said. “If someone is denied financing from a bank, they can come to us and see if they could qualify for a loan.”
Businesses also do not have to obtain a letter of credit denial, a previous requirement that has now been waived.
Additionally, the risk analysis oversight that the U.S. Economic Development Administration usually has on the development council has also been waived, increasing the chances of small businesses to be granted loans, Mendiola said.
Loans from the development council range from $25,000 to $50,000, with a 4% interest rate. Businesses can apply for loans on Aug. 24.
“The goal of this money is to help small businesses, so that they can stay afloat and provide them with working capital,” Cuellar said. “… These types of loans are going to be extremely important for small businesses that sometimes have no place to get a loan.”
The development council primarily focuses on working capital loans, Rodriguez said, but they also assist in acquisition, development or rehabilitation of property, start-up businesses and local expansion.
Rodriguez said since these funds aim to support small businesses, it also gives minority entrepreneurs an upper hand.
“These loans create wealth and retain jobs and especially support minority- and women-owned businesses,” he said.
According to the U.S. Bureau of Labor Statistics, the unemployment in Starr County for June was 18.5%. In June 2019, that number was 9.9%.
“We know that small businesses create about two-thirds of all the jobs that we have locally, and across the state of Texas, and across the nation,” he said.
Mendiola emphasized that the goal of the fund is to boost employment in the region.
“The program is really for job creation, job retention within our four-county region,” he said. “… It’s intended to facilitate rapid and prudent lending practices.”
Small businesses can reach out to the development council for more information, or to apply for a loan at (956) 722-3995.