While the program has existed for years, it was considered a “best kept secret” by the Small Business Development Corporation of Orange County.
Before the new website was launched to make the process less cumbersome, business owners needed to apply through the state agency which oversees the program—the California Infrastructure and Economic Development Bank’s Small Business Finance Center, better known as IBank.
“Through California’s small business loan match, we hope to break down the barriers between lesser-known mission-driven lenders and busy entrepreneurs,” Megan Hodapp, program manager for IBank’s Small Business Finance Center said in a promotional video on the program’s website. “And make the process of accessing trust-worthy loans as easy as possible for California’s small business owners.”
With a net loss to other states of more than 17,000 businesses between 1990 and 2019, according to a Los Angeles Chamber of Commerce study—and more than 350 losses since 2020, the state is looking to facilitate business development.
One business owner who has benefited from the program said the loan allowed him to expand his business and establish a foothold in his industry.
“I was able to purchase a building that was approximately 5,000 square feet,” Jerry Riggins, owner of Riggins Urban Barber College, said on the program’s website. “I was able to open up my additional location, which allows me to increase my revenue tenfold.”
Created in 1994 as part of the Governor’s Office of Business and Economic Development, IBank finances public infrastructure projects and private business development to “promote a healthy climate for jobs, contribute to a strong economy, and improve the quality of life in California communities.”
The program does not offer loans directly to businesses but serves as an intermediary between companies and banks, including several nonprofit establishments, while offering guarantees to lenders to encourage loan origination.
“By guaranteeing loans, IBank gives lenders the confidence they need to issue loans to small businesses that otherwise may struggle to access funding,” according to the agency’s website.
The goal, officials said, was to help businesses “grow and prosper.”
Small businesses with up to 750 employees are eligible to apply. Funding can be used for agriculture, business expansion, construction, inventory, lines of credit, and start-up costs, among other things.
Credit qualifications and interest rates vary based on lender criteria. Many lenders working with IBank are so-called certified community development financial institutions.
Such groups are committed to working with businesses that fail to meet traditional bank loan requirements—including those with lower credit scores, who are without adequate collateral, or have prior loan defaults.
The affiliated institutions also offer more flexible and affordable repayment plans than their traditional counterparts.
The program is backed by the federal government’s State Small Business Credit Initiative, which recently allocated $1.2 billion to California to assist small businesses.
Originally called the Small Business Loan Guarantee Program, the finance center was established in 1968 to “promote statewide economic development by increasing opportunities for entrepreneurs, the self-employed, microbusiness and small business owners to have better access to capital and other technical resources,” according to its website.
Such is meant to improve investment in low- and moderate-income communities.
Approximately 453,000 jobs were created or retained across the state in all industries because of the loan guarantees, including nearly 15,000 in the 2022-2023 fiscal year.
The IBank supported $290 million in loans in the same timeframe and approximately $2.1 billion since the 2013-2014 fiscal year.
Another beneficiary of the loan program expressed his gratitude for the opportunity.
“I needed capital to purchase inventory for my beer-importing business,” Christopher Timperio, owner of Suisse Imports, said on the program’s website. “I am grateful this loan helped me get the ball rolling on my dream business.”
