O.C. Small Business Development Corporation Announces $1 Million Investment for Local At-Risk Businesses

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The Small Business Development Corporation of Orange County recently announced its celebration of Comerica’s $1 million investment in SBDC-OC’s mission of helping vulnerable Southern California businesses achieve success.

Representatives of both organizations held an official check-signing event in August at SBDC-OC’s headquarters in Santa Ana, marking the development corporation’s receipt of the funds. Dubbed an EQ2 investment, the $1 million outlay is an Equity Equivalent investment which will function as a deeply subordinated loan with certain features that allow it to work like equity.

These types of bank investments serve as tools to help community development financial institutions (CDFIs) increase lending in economically disadvantaged areas. SBDC-OC is a state-certified CDFI and Comerica’s $1 million EQ2 investment will support its activities that help small businesses successfully operate their ventures by accessing capital and receiving general management assistance and business education.

The corporation’s mission is particularly focused on businesses located in low- to moderate-income communities or opportunity zones and are owned by women, people of color, the disabled and veterans. Small Business Development Corporation, which is a nonprofit public benefit corporation, functions as one of seven Financial Development Corporations in California operating under the state’s public municipal bank, The California Infrastructure and Economic Development Bank known as IBank.

Among other things, the corporations administer the long-standing State Loan Guarantee Program, which provides credit guarantees for eligible small businesses seeking loans or lines of credit from lenders. The program is among many different funding and business services products SBDC-OC offers the small business community in Southern California and other parts of the state. Its offerings include the Entrepreneur Loan Fund, Disaster Assistance Loan Guarantee Program and the California Capital Access Program.

The EQ2 investment’s unique features include its function as a general obligation debenture on SBDC-OC’s balance sheet that is not secured by company assets. It is also subordinated to the development corporation’s other creditors. The investment includes a 10-year term and fixed lowmarket interest rate.

“On behalf of SBDC-OC’s board of directors we are thrilled and delighted to have received Comerica Bank’s $1 million equity investment, which will be utilized to expand the agency’s small business lending platform and future affordable housing initiatives,” said president and CEO Michael A. Ocasio. SBDC-OC is a quasi-public/private 501(c)(3) not-for-profit public benefit corporation, which operates under the state’s public municipal bank, The California Infrastructure and Economic Development Bank (IBank). It is not affiliated with the U.S. Small Business Administration.

The corporation, established in 2001, is a mission-driven organization dedicated to assisting small business owners secure operating capital through its capital access programs, including California’s State Loan Guarantee Program, Export Lines of Credit, Bond Conduit and Green Energy Initiatives to support small business access to credit.

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