Edinburg Council Approves Small Business Loan Program

Edinburg TX – Nov. 2, 2022

The Edinburg City Council approved the Small Business Loan Program at last night’s meeting. The program will provide up to $50,000 in loans at a reduced interest rate.

According to Edinburg Assistant City Manager Nelda Ramirez, Economic Development staff received a proposal from the LiftFund for an interest buy down program (IBDP) for small businesses. LiftFund is a non-profit organization that provides small business loans to underserved business owners, especially minority and women entrepreneurs, throughout the Southeast USA.

“I think this is really going to help the small business community.” Mayor Ramiro Garza Jr. said. “I know you’ve been doing this for a long time with the City of McAllen. I appreciate you coming here. I want to ask the EDC board to increase that amount next year so that more businesses get access to these programs.”

According to Ramirez, the city will “buy down the interest from 9% to 2.5%. That would be available for all Edinburg businesses.”

Garza asked staff and the LiftFund representative to focus on a particular area that will undergo extensive construction.

 “There’s a big project on East 107 and around the square,” Garza explained. “A lot of those small businesses are going to be affected during the construction or reconstruction of 107 because there’s drainage that’s going to be put in there. If there’s a way to target those areas, a lot of those small businesses, I think they’re going to need a little bit of help. And I think this program may help them.”

The LiftFund presentative said they have already talke with the Small Business Administration to do a community walk in that area and pass out information about the program.

The Edinburg EDC Board approved injecting $50,000 for the program at their October 25, 2022 meeting.

The proposed Small Business Loan Program will allow the City of Edinburg to support eligible small businesses and entrepreneurs within Edinburg City limits with funding to help sustain and grow their business.

With a $100,000 interest buy down participation through the City and EEDC, LiftFund can disburse $450,000 in capital loans to up to nine (9) small businesses with an average loan amount of $50,000 at a 2.5% interest rate. The number of small businesses may vary depending on the loan amounts.

The City of Edinburg will provide $50,000 in funding available from funding received from the American Rescue Plan Act of 2021 (ARPA) that will be used to support the business loan program. The Edinburg EDC will match the funding with an additional $50,000, totaling $100,000 program.

LiftFund staff will administer the loans according to the program guidelines set by the board of directors, and provide the following services:

• Program design
• Demographic and impact reporting
• Program promotion
• Website design
• Application design and collection
• Application review for eligibility verification
• Disbursement of funds
• Secure application and data storage and
• Issuance of 1099 forms

The program may be ongoing for a 12-month period and is set to begin in FY2023.