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Thursday, June 20, 2024
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McAllen
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Partnership for Small Business Loans Assistance

McAllen Small Business Support Fund to provide loans to help McAllen businesses affected during COVID-19 pandemic

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"Small business is the lifeblood of any city’s financial success, especially here in McAllen."  - Mayor Villalobos. Image for illustration purposes.
“Small business is the lifeblood of any city’s financial success, especially here in McAllen.” – Mayor Villalobos. Image for illustration purposes.

Texas Border Business

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McALLEN, Texas – As the past McAllen Commission meetings, commissioners approved creating the McAllen Small Business Support Fund, in partnership with the McAllen Chamber of Commerce to provide funding to small businesses in McAllen affected by the COVID-19 global pandemic. The City of McAllen will provide American Rescue Plan funds, in the amount of $4 million to McAllen Small Business Support Fund, to provide grants and loans up to $30,000 at zero percent interest, in three different tier levels, for businesses in McAllen with no more than 100 employees and with a gross revenue not to exceed $3 million. 

“Small business is the lifeblood of any city’s financial success, especially here in McAllen with so many innovative entrepreneurs who have helped to create the economic landscape of the community, providing jobs, and unique services and products,” said McAllen Mayor Javier Villalobos.  “The funding will help our small business community to stay open, keeping people employed and providing the goods and services that makes McAllen the retail center in not only the Rio Grande Valley, but also, South Texas.”

The goal of the grant and loan program is to help those local and small businesses in McAllen with funds that may be used for working capital, leasing space, insurance and/or utilities.  Other valid expenses include counseling and legal aid to prevent eviction; repairs and digital literacy assistance or job trainings to specifically address negative economic or public health impacts COVID-19 preventative measures, such as accommodations to physical location to enable social distancing, enhance cleaning efforts, establish barriers or partitions, COVID-19 vaccination, testing or contact tracing programs and purchasing of PPE also qualify. Other approved expenses include authorized technical assistance, counseling, or services to assist with business planning needs as well as short-term marketing campaigns. Additionally, funding for inventory, supplies, furniture, software and equipment may also be considered. 

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Funds will be distributed on three levels: Level I – $10,000; Level II – $20,000 and Level III – $30,000 and level funding qualification will be strictly decided on the revenues of the business’ 2020 submitted tax return.  Level I funding will be considered a grant; at Level II, $10,000 will be considered a grant and $10,000 will be considered a deferred forgivable loan over 12 months.  Level III funding will award a $10,000 grant and $20,000 will be considered a deferred forgivable loan over 24 months. 

Funding will be approved based on such factors as must be in good standing with the Texas Secretary of State; applicants are 51% majority owner of business; can show need; are not in bankruptcy; are current with all local, state and federal taxes, fees and any other debt payments to the City of McAllen;

“Small businesses are experiencing severe financial distress due to the economic impact of COVID-19,” said Blanca Cardenas, Interim CEO/President of the McAllen Chamber of Commerce.  “We are proud to further our partnership with the City of McAllen to help small business owners in our community stay afloat after this unprecedented experience which still continues to affect local businesses especially hard.”

Approved businesses include that the establishment has a brick-and-mortar location within McAllen city limits; is a home-based business with proper home occupation permit; was established before March 1, 2020; and must be able to demonstrate that the business was affected by the pandemic by at least 20% decrease in sales from 2019 to 2020, amongst other eligibility requirements. Businesses not allowed include currency speculators; securities investments; tobacco production or gambling establishments; sexually oriented businesses, as well as other businesses not listed here.

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Funds will be disbursed for documented eligible project expenses and paid directly to third-party vendors and not the businesses directly.  Periodic reporting will be performed, depending on funding level at the six month, 12 month and 18 month interval.

The application process requires the following documentation: Secretary of State Texas file number; owner’s Texas driver’s license number; Social Security number; employer identification number; signed 2019 and 2020 tax return; and proof of McAllen location.

For more information about the McAllen Small Business Growth Fund or its rules, please contact the administrator at grants@mcallenchamber.com.   The application will be available online and can be found at www.grant.mcallen.org.  Applications open January 10, 2022 at 10:00 a.m.

The funding source for the McAllen Small Business Growth Fund comes from the City of McAllen through the American Rescue Plan. Applications will be approved according to the established guidelines.  Completed applications, including all documents outlined above, are considered on a first come, first served basis. Funds will be allocated on a first-come-first-served basis until the funds are depleted. Businesses who have not received assistance and are on the waiting list from the McAllen COVID-19 Small Business Fund should take priority before allowing assisting previously funded enterprises.

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