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Soledad outlines CDBG business loan program; first $245,000 loan issued to hardware store
Summary
Economic development staff described Soledad’s CDBG Business Assistance Loan Program, reporting $970,141 received in earlier rounds, a $750,000 award in July 2023, and the March 2024 issuance of a $245,000 loan to a new Ace Hardware; lending limits, job-creation requirements and monitoring procedures were explained.
City economic development staff presented details of Soledad’s Community Development Block Grant (CDBG) Business Assistance Loan Program during the council meeting, answering council questions about eligibility, loan terms and program oversight.
Cynthia Vargas, the city’s economic development coordinator, said the city received roughly $970,141 in CDBG funds between 2020 and 2021 and was awarded $750,000 in July 2023 to operate an economic-development loan program. "On July of 2023 the city was awarded $750,000," Vargas said, and in March 2024 the city issued the program’s first loan, a $245,000 loan to a newly opened Ace Hardware to bridge a financing gap.
Staff described typical loan terms and eligibility: loans generally range from about $35,000 to $105,000 with a maximum just under $250,000 and terms of three to 15 years; there is no prepayment penalty. Vargas and consultant Angel Johnston emphasized that the program focuses on job creation — "for every $35,000 that's borrowed, the business needs to create one new job," Vargas said — and that monitoring includes verification of job-creation paperwork, monthly repayment tracking by staff, and a revolving-loan fund model whereby principal and interest are recycled for future loans.
Councilmembers asked how the city handles delinquency and defaults; staff said they work directly with borrowers to restructure payments, reamortize loans, or pursue collateral if necessary. Staff also offered to produce a one-page metrics summary for the council showing loans made, jobs created and the balance in the revolving fund to assist budget planning.
No formal action was required; the presentation was informational and staff said they will supply follow-up materials and outreach information to potential applicants.
