Perhaps the third time will be the charm after Hollister’s low-interest business loan program came back on Feb. 6 to the City Council for another tweak. 

The council approved the new version of the program that is now available to any business, anywhere in the city limits, not just in the downtown district. They also increased loan limits.

The program was first approved in May 2022 to provide 2% interest loans for up to 15 years payback. It was originally set up to include $2 million for start-up restaurants or commercial/non-kitchen businesses in the downtown district.

Originally, the loan amounts would vary depending on the type of business. A restaurant with a commercial kitchen could qualify for a $150,000 loan. A retail or restaurant-type of business that does not have a commercial kitchen could qualify for $50,000. By Oct. 3, 2022, only four applications were received and one loan was awarded. The two others were seeking more money and did not move forward.  

The council decided to consider applications on a case-by-case basis for a larger loan amount for those applicants that are both the property owner and business owner and directed staff to review the program and recommend changes.

At the Feb. 6 meeting, David Mirrione, assistant city manager, said there had only been four applications, one had been funded, one was ineligible, and two were seeking more money than was being offered. He said now that the program was about to change, the applicants were notified in case they wanted to apply for the portion they could get from the city. He said one applicant has decided to proceed with the loan process.

Mirrione said the recommended changes would include:

• Making the loan program available to any business with a publicly accessible physical location in the downtown district.
• Increase the maximum loan amount from $150,000 to $300,000 for business owners that also own the property where the qualifying business is located.
• Applicants can receive an additional $50,000 to be used solely for Americans with Disabilities Act upgrades.
• The interest rate will increase from 2% to 4% simple interest.
• Application period ends on Feb. 27 at 4:00 p.m. and applications will be reviewed on March 31, 2023.
• All loan applications will be reviewed by the Loan Approval Board, rather than the council.
• The final loan amount will be determined by the Loan Approval Board.
• Decisions of the Loan Approval Board are not appealable.
• The City Council will not consider any loan applications.
• All other guidelines previously set for the Low Interest Business Loan Program shall remain unchanged and in effect for the duration of the program or until modified by the City Council at a later time.

Councilwoman Dolores Morales said she was disappointed in the delays and suggested the interest rate be lowered to 1.5% or even offer the money as a grant. She and Councilmembers Rolan Resendiz and Rick Perez wanted the process to speed up and get the word out about the changes as soon as possible through BenitoLink, social media and handouts door-to-door. Perez, Resendiz and Mayor Mia Casey wanted the interest rate to stay at 2%.

Edgar Mayorca, owner of Café con Leche, spoke during public comments about his frustration in trying to procure one of the loans. He first applied for a loan last May. He said he has a permit for a commercial kitchen in his coffee shop, but the city has told him he is not eligible to receive $150,000 because he does not have a commercial kitchen. He complained about how long it was taking to help small businesses “rise up.”

“One hundred fifty [thousand] is nothing for you, but for us, with that we could put a parklet outside, a coffee roaster to help build our business,” he said. “We have people coming from Morgan Hill and San Jose just to feel the vibe of the coffee shop. This is taking too long. My family and I are hurting.”

Samantha Perez said she moved to Hollister two years ago and has a jewelry business. She turned in her application two months ago, she said.

“I’m not a new business,” she said. “I’m an existing business that’s solely operated online. I took a chance on Hollister and opened my studio on San Benito Street. I’m hoping you open this program to existing businesses.”

The City Council did not address existing businesses and kept the interest rate at 2%. A second round of approvals will take place April 1-30.

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Hollister council changes rules for loans to new downtown businesses | BenitoLink