Wall Street financial house Goldman Sachs Group Inc. has made $20 million available to help fight the credit crunch with loans in the Downtown area and other parts of the city as well as a support program for small businesses owned by members of various ethnic communities in South Los Angeles.
VEDC, a non-profit business development organization and lender, will oversee $5 million from the lending program, funds that have been dedicated to the Downtown area and other parts of the city.
The small-business support program focused on ethnic and low-income business owners in South Los Angeles will be operated through Los Angeles Southwest College.
Another element of the plan includes business-education programs to be offered by Los Angeles City College and the Long Beach Community College District. The programs will be free to business owners selected through a competitive application process administered by the Initiative for a Competitive Inner City in partnership with Los Angeles City College and the Long Beach Community College District.
VEDC is the first organization in the Los Angeles area to receive funds to lend to small businesses under the initiative. Roberto Barragan, president of the organization, said that the program will seek existing enterprises that are struggling to get through the current downturn despite having solid business plans and good potential.
Barragan said that a premium will be placed on small businesses that want to make new hires but have been reluctant to do so because of the credit crunch, which has left many without access to sufficient credit to help finance operations during the economic slump.
"Lenders typically look at a company's credit, collateral and cash flow," Barragan said. "But we're flexible with this program — we're willing to work with businesses that might be weak in one of those areas but strong in the other two as they try to get through the downturn."
Barragan said he expects that as much as 40% of the funds the VEDC will be able to access under the Goldman Sachs program will be loaned to Downtown businesses. He added that VEDC representatives will consider established businesses only, focusing on operations with annual revenue between $150,000 and $4 million.
Los Angeles Mayor Antonio Villaraigosa welcomed the effort by Goldman Sachs as a much-needed boost.
"Not only will this investment set in motion job creation at the most grassroots level, but it will have a real impact on the lives of the 70% of Angelenos [who] are employed by small businesses by granting them the opportunity to expand their entrepreneurial enterprise through education, loans, and networking,'' Villaraigosa said.
Anyone interested in the possibility of obtaining a loan through VEDC can contact Welmer Jurado at (818) 907-9977 for more information.
Jerry Sullivan is editor of the L.A. Garment & Citizen.
Images from VEDC.
Read more stories from the L.A. Garment & Citizen »
Leave a comment