Small Business Loan Assistance Partnership

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“Small businesses are the cornerstone of the financial success of any city, especially here in McAllen. – Mayor Villalobos. Image for illustration purposes.
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Texas border affairs

McALLEN, Texas – As at the last McAllen Commission meetings, the commissioners approved the creation of the McAllen Small Business Support Fund, in partnership with the McAllen Chamber of Commerce, to provide financing to small businesses in McAllen affected by the global pandemic of COVID-19. The Town of McAllen will provide US bailout funds in the amount of $ 4 million to the McAllen Small Business Support Fund to provide grants and loans of up to $ 30,000 at zero percent interest, at three different levels, for McAllen companies with no more than 100 employees and with gross revenue not exceeding $ 3 million.

“Small businesses are the lifeblood of any city’s financial success, especially here at McAllen with so many innovative entrepreneurs who have helped create the community’s economic landscape, providing jobs and unique services and products.” McAllen Mayor Javier Villalobos said. “The funding will help our small business community stay open, keep people working, and deliver the goods and services that make McAllen the retail hub of not only the Rio Grande Valley but also southern Texas.”

The goal of the Grants and Loans program is to help local and small businesses in McAllen with funds that can be used for working capital, space rental, insurance and / or utilities. Other valid expenses include advice and legal aid to prevent eviction; repairs and digital literacy assistance or job training to specifically address negative impacts on the economy or public health COVID-19 preventive measures, such as physical location accommodation to enable social distancing, improve efforts to cleaning, setting up barriers or partitions, COVID-19 vaccination, testing or Contact tracing programs and the purchase of PPE are also eligible. Other approved expenses include technical assistance, advice or authorized services to meet business planning needs as well as short-term marketing campaigns. In addition, financing of inventory, supplies, furniture, software and equipment can also be considered.

The funds will be distributed at 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 income of the 2020 tax return submitted by the company. 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 12-month deferred forgivable loan. Level III funding will provide a grant of $ 10,000 and $ 20,000 will be considered a 24-month deferred forgivable.

Funding will be approved based on factors that must be in good standing with the Texas Secretary of State; the candidates are majority owners at 51% of the company; can show the need; are not bankrupt; are up to date with all local, state, and federal taxes, fees, and other debt payments to the City of McAllen;

“Small businesses are in serious financial difficulty due to the economic impact of COVID-19,” said Blanca Cardenas, CEO / Acting President of the McAllen Chamber of Commerce. “We are proud to continue our partnership with the Town of McAllen to help small business owners in our community stay afloat after this unprecedented experience which continues to particularly affect local businesses.”

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Approved businesses include that the facility has a physical location within the city limits of McAllen; is a home-based business with an appropriate home occupation license; was created before March 1, 2020; and must be able to demonstrate that the business has been affected by the pandemic by a decline of at least 20% in sales from 2019 to 2020, among other eligibility conditions. Unauthorized businesses include currency speculators; securities investments; tobacco or gambling establishments; sexually-oriented businesses, as well as other businesses not listed here.

Funds will be disbursed for eligible project expenses documented and paid directly to third party vendors and not directly to companies. Periodic reports will be made, depending on the level of funding at six-month, 12-month and 18-month intervals.

The application process requires the following documents: Texas Secretary of State’s 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’s location.

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

The McAllen Small Business Growth Fund’s source of funding is from the Town of McAllen through the American Rescue Plan. Applications will be approved according to established guidelines. Completed applications, including all of the documents described above, are reviewed on a first come, first served basis. Funds will be allocated on a first come, first served basis until funds are exhausted. Businesses that have not received assistance and are on the McAllen COVID-19 Small Business Fund waiting list should be given priority before allowing assistance to previously funded businesses.

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