Eligible small businesses can once again apply to LiftFund’s popular zero-interest loan program, thanks to $2 million in new funding, allowing the nonprofit microlender to loan out approximately $8 million.
The $2 million is being leveraged to pay down the interest on the loans, which LiftFund will fund.
The $2 million comes from the City of San Antonio and grants from LiftFund and financial services company Wells Fargo.
Loans will range from $500 to $100,000, according to a press release from the city, with previous program loans averaging $44,649. The interest-free loans can be used for everything from startup costs, daily operations or expansion. That can include payroll, equipment and inventory.
To be eligible, small businesses must located in, or relocating within, San Antonio city limits, and must intend to hire at least one full-time employee. Businesses that have received a no-interest loan from LiftFund in the past two years are not eligible. The program will prioritize applicants unable to secure conventional financing.
A lack of access to capital is often the No. 1 challenge of startups and small businesses. Since 2016, the city has partnered with LiftFund on this program, distributing more than $7 million in interest-free loans that have supported local businesses and, the city says, contributed to the creation and retention of almost 1,500 jobs.
The zero percent loan the Beignet Stand received “was a godsend,” said owner Elisa Trevino, who with her partner Michael Grimes launched their first culinary venture in 2016 after attending LaunchSA’s culinary business accelerator.
In 2022, the couple sought financing to renovate and expand their space, and turned to LiftFund, which they’d learned about through LaunchSA. The loan allowed them to build out a new commercial kitchen.
“We’ve been able to realize our goals without having to put additional financial stress on our family or on our business,” said Trevino. “And we get to reap the rewards and the benefit of that every day.”
LiftFund, which is celebrating its 30th anniversary this year, serves customers who are not eligible for traditional bank loans. Just over 85% of its clients are entrepreneurs of color, 40% are women and 26% are startups, according to LiftFund’s website.
“This year’s zero-interest loan program launch signifies our steadfast commitment alongside the City of San Antonio to strengthen and elevate the local small business community,” said Laurie Vignaud, president and CEO of LiftFund. Vignaud replaced founder and former president and CEO Janie Barrera, who has gradually stepped away from leading the organization.
The city called the program “a strategic investment to strengthen the city’s small business landscape.” It is spending $500,000 from the general fund and just over $1 million in federal pandemic relief funding on the program; LiftFund and Wells Fargo is making up the rest of the $2 million.
The city also recently announced the first two businesses eligible for $50,000 grants as part of another economic development program that seeks to bolster “second stage” companies, which are defined as those with revenue between $1 million and $50 million, and between 10-99 employees.
Applications are still open for that program, which has another $400,000 to grant to eligible companies.
The city’s investments in local businesses help reduce the barrier of access to capital, said Mayor Ron Nirenberg in Thursday’s release. “Investing in our small businesses embodies our commitment to fostering innovation, generating employment, and bolstering the city’s economic well-being.”
Former LiftFund CEO Janie Barrera is a member of the San Antonio Report’s board of directors.