Economic Development Block Grant (EDBG)

Business Start-Up/Expansion Loans

The City of Yreka is offering low-interest economic development loans to City businesses that are ready to start-up or expand. Funds are available through the Economic Development Block Grant (EDBG) program and are intended to help those who don't meet strict bank loan qualifications. These applicants may include those whose ventures are riskier than the bank wants to take on or for those businesses without a track record.

In the past, loans have ranged from $35,000 to $150,000, with interest rates of 3-7% and terms of up to 10 years. As a condition of this program, one full-time job must be created for every $35,000 loaned. The created jobs will be primarily entry-level wage employment opportunities. If a business is kept afloat by EDBG loan funding, saving existing jobs, then job preservation may fill the job creation requirement.

As a second condition of the EDBG loan qualification, some matched funding from the applicant is required. This can be either in the form of financing or 'sweat equity' and equipment.

This program is designed to ensure non-competition with local, private lenders. To be eligible, an applicant must have either had their loan application denied outright by a bank or have a gap in funding between what a bank will finance and what is needed for start-up or expansion.

Great Northern Corporation (GNC), acting as the loan officer for these funds, is in charge of performing credit reviews, loan assessments, and appraisals. After GNC screening and evaluation, eligible business loan applications for are presented to a local loan review committee chosen by the Yreka City Council. The loan review committee considers each application it receives and decides whether or not to allocate loan funds. Final lending approval, however, is determined by the State of California program analysts.

Projects benefiting from this funding in Yreka include an asphalt plant, four restaurants, a health club, a financial consulting firm, and a health clinic.

For more information, please call Michael Wecksler, Great Northern Corporation, at (530) 938-4115, Ext. 19.