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Budget panel pauses $20 million emergency small-business loan after fiscal questions
Summary
The Budget and Finance Committee debated Supervisor Ronan’s proposal for a $20 million, no-interest loan program to help small businesses weather the COVID-19 shutdown. Members split over fiscal risk; the committee voted to continue the measure so the Controller can provide updated revenue and reserve estimates.
San Francisco — The Budget and Finance Committee on March 25 debated an emergency $20 million small-business loan program but deferred a final recommendation after supervisors pressed for more fiscal detail.
Supervisor Ronan introduced the two ordinances that would authorize the treasurer to secure a short-term $20 million line of credit and appropriate $20 million plus $600,000 from the General Reserve to fund no-interest loans of up to $15,000 with no payments due for 12 months. "This will help businesses hold on through the immediate months ahead," Ronan said, urging a low-barrier program targeted to businesses at high risk of permanent closure and expanding eligibility to firms with gross receipts up to $2.5 million.
Supporters framed the loans as an urgent, short-term tool that could keep neighborhood businesses alive while federal programs ramp up. "We need a low-barrier option for these businesses," Ronan said, describing owners who lack the collateral or credit histories SBA loans require.
Opponents and some fiscal conservatives on the committee asked how many loans would default and whether the city’s reserves could absorb large losses. Supervisor Mandelman cautioned that the default rate could be substantial and requested more context: "I would like to give this a little bit more time and get more information from the controller about where we are fiscally before we potentially subject ourselves to that risk."
Controller Ben Rosenfield told the committee that revenue-loss estimates would be published next week and acknowledged the uncertainty: he said the appropriation includes a $20 million reserve backstop so the city could repay its loan obligation even in a severe default scenario, but he declined to endorse a specific default-rate projection. "We do not have complete information on given the moment we're in," Rosenfield said.
Legal staff said the city attorney’s office could draft substantive amendments (which could require a continuance) to require partial repayment if federal assistance becomes available.
A roll call failed to advance the ordinances to the full Board (Supervisor Walton voted yes; Supervisors Mandelman and Fewer voted no). The committee then voted to continue Items 10 and 11 to its next meeting so staff can present updated revenue and reserve projections and additional implementation details on eligibility, language access and geographic distribution.
The next step is a presentation from the Controller planned for next week; the committee will reconvene before deciding whether to recommend the program to the full Board.
