March 3, 2021
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Sebastopol adopts Low-Interest Loan program

By: Joshua Farestveit-Moore
September 25, 2020

This year hasn’t been easy, especially if your address reads Main Street rather than Wall Street. But entrepreneurs in Sebastopol finally caught a break in early September when the city council passed a resolution to offer low-to-no-interest loans to small businesses affected by Covid-19. 

The loan program, initially proposed by Councilmember Neysa Hinton in early July, isn’t some newfangled concoction, but rather based heavily on the system pioneered by Healdsburg. Covid-19 hit them hard—their economy is mostly tourism, so they set aside $600,000 in small, deferred-interest loans. Their program helped bridge the gap for struggling businesses who weren’t able to take full advantage of the Federal Government’s Paycheck Protection Program (PPP). 

Now Sebastopol has a system of their own, though at a much smaller starting allotment of $150,000. 

“I believe it’s going to come in perfectly timed for the companies who were either denied because [the PPP] ran out of money, or they got the cash and now it’s gone,” Hinton said. “I look at it as an investment in our small businesses. They’re who provide most of our tax revenue.” 

Seventeen companies expressed interest in the program, according to Hinton. More are sure to apply now that it’s been approved. But they’re all fighting over the same pool of cash, $150,000. 

That’s not a small number, but it might not be enough. The program’s allotment caps out at $15,000 a pop for companies with six or more full-time employees or their hourly equivalent. For everyone else? Five grand! Yet those who do manage to snag a piece find themselves with some incredibly favorable rates. Loan repayment plans range from three to five years, no interest if paid in full. 

Convenient, but it’ll cost the city some money--either through defaults or loss to inflation. Not every company is going to walk away from this, not when 80,000 small businesses nationwide permanently shut their doors between March and July. 

Sebastopol estimates a total cost of about $7,000-$13,000 for the program. 

But it’s a small price to pay to lend a helping hand, according to Hinton. “I would rather invest in our small businesses than just leave the money sitting in the bank,” she said. “We need to all step up and do what we can. That’s just how I look at the world.”  

The application period for the loans will end September 28. After that it’s down to a blind lottery to decide who gets the money. Once it runs out? It’s gone. Contact the Sebastopol City Hall for further details.