Elk Grove Considers Lending Small Businesses Money To Jump-Start Economy
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ELK GROVE (CBS13) — Elk Grove is ready to hand out loans if it means adding jobs to.
“Right now the biggest challenge that businesses have is access to capital,” said Randy Starbuck, who works for the city’s economic development department.
So the suburb is exploring how it can help small-business owners expand.
“With that we mean wanting to add one more person or trying to make relatively small equipment purchase.”
The loan is no more than $25,000, but the interest rates are lower than a bank or a credit card. It’s a move business advocacy groups are in favor of.
“Coming up with a new system for trying to provide capital. I applaud their efforts and I wish every city in the state would mirror it,” said National Federation of Independent Business spokesman Ken DeVore.
Other cities do have loan programs, but Elk Grove hopes by offering small loans, they’ll be able to jolt the stagnant job market in the city.
It’s a tactic even state Sen. Ted Lieu, D-Redondo Beach, is taking notice of.
“Anything that can help small businesses start can have a multiplier effect.”
Meaning helping one business could help others in the community grow, too.
But not all shop owners believe this is the magic key to unlocking the secret to new jobs.
“I don’t think it’s a good idea, because I think most businesses should be able to stand on their own legs,” said Ted Hofmeister, the owner of Elk Grove Lock & Safe
But while the locksmith believes it is the wrong time, the city says with extra reserves, this is when Elk Grove can help grow its own economy.
If the city council approves the loan program, the money would be available starting this fall.