Santa Cruz small businesses struggle to find loans to stay afloat during COVID-19 pandemic

SANTA CRUZ, Calif. (KION) Small businesses closed or operating with lesser services during the current shelter-in-place has caused many to look for loans to get their business through the next few months.

Classic Vapor Dry Cleaners on Water street is open during the shelter-in-place, but has lost much of their clientele. However, the business still services many first responders and is even doing dry cleaning for local homeless in shelters.

Their owner, Pamela Whittington, attempted to enter the federal paycheck protection program, but funding ran out before she was able to successfully submit her application.

“We made it to the last phase, submitted all of the documentation, signed all of the paperwork and it was cued to be submitted and funding ran out that morning,” Whittington.

The building on Water Street, where Classic Vapor is located, has been operating as a dry cleaner and laundromat for more than 100 years. Whittington is worried they won't be able to make payroll come the first of May.

“We’re doing a lot, but barely making it,” Whittington said.

Starting Monday, the city of Santa Cruz is accepting applications for a Microloan Program. It will provide loans ranging from $5,000-$10,000 to be allocated to eligible, qualified small businesses based on availability of funds, program guidelines and the submission of the online application with required documentation.

“It provides funds for these small businesses while they’re waiting for these other funds to come through,” Santa Cruz mayor Justin Cummings said.

Loan funds can be used for operating expenses such as rent, payroll, utilities, inventory and supplies. Interest rates vary from 0% for bridge loans up to 3% for terms up to 3 years.

In less than 24 hours, more than 60 Santa Cruz businesses applied for the microloan. The city said they'll accept applications until they reach 120 submissions.

“Our community thrives on small businesses and we know how important it is for them and the sacrifices they’ve made over long periods of times to keep them going,” Cummings said.

Details about the Santa Cruz program application requirements and process is posted on the Economic Development website.