Solano EDC seeks successor terms for ARPA-funded revolving loan fund, proposes smaller loans and higher rate
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Summary
Solano EDC told supervisors that a $3.6 million ARPA loan program made 55 loans and has $745,329 returned for re‑lending; it proposed lowering the maximum loan to $75,000, raising interest to 7% and retaining a 630 minimum credit score to keep the fund sustainable.
Solano Economic Development Corporation representatives told the Solano County Board of Supervisors that the county’s ARPA‑funded small business revolving loan fund successfully made 55 loans and is now ready to relend repaid principal and interest.
At a public briefing, Sean Quinn and Chris Rico said the program originally authorized $4,000,000 (with $3,600,000 to be lent) met its loan target and has approximately $745,329 returned to the fund. They said the loans reached every city and unincorporated areas of the county, with restaurants and bakeries comprising the largest sector (about 24% of the portfolio) and an average loan size of roughly $65,000.
To preserve the program as a lasting legacy of the county’s pandemic recovery funding, the EDC recommended successor terms: reduce the maximum loan from $125,000 to $75,000, limit loans to one per borrower, require businesses to have been operating two years in Solano County (to avoid financing startups), maintain a minimum credit score of 630, increase the servicing fee paid to participating lenders (covered by administrative funds) from $55 to $65, and raise the program interest rate from 6% to 7% to improve sustainability. Staff said administrative costs will remain capped at 10% and the program will report quarterly to county staff.
County staff and the EDC said the program includes technical assistance from the Small Business Development Center; borrowers pay a $250 application fee that is rebated if they complete a second assessment. The presenters said 17 businesses are currently on a waiting list and that Vallejo added $319,000 in ARPA funds restricted to Vallejo businesses; Vallejo’s subprogram is operated separately under its own policy and lender relationships.
Supervisors asked about borrower monitoring and whether follow‑up is required; EDC said recipients are encouraged (but not mandated) to take further technical assistance, and the program refers businesses to local resources. Staff confirmed that once repaid funds are out of ARPA restrictions, the reused funds do not need to be limited to COVID‑impacted businesses. No formal vote was requested; staff sought board feedback and will return with a draft successor MOU and any necessary documents for formal action.