San Francisco, CA — Mayor London N. Breed, the Office of Economic and Workforce Development (OEWD), Main Street Launch, and the San Francisco African American Chamber of Commerce today announced a third significant investment of $2.5 million in the City’s African American Small Business Revolving Loan Fund (AARLF). The historic fund was established by Mayor Breed to address the perilous position of many Black-owned and Black-serving San Francisco businesses resulting from disproportionate impacts of the pandemic.

This latest expansion of the AARLF is made possible through the continued support of the San Francisco Foundation and the generosity of Aneel Bhusri, Chief Executive Officer of Workday. The additional investment brings the total secured funding to $6.3 million and will enable the Fund to support an estimated 150 businesses.

“This has been such a difficult year for small businesses across San Francisco, and sadly, Black-owned businesses across the country have been especially hard hit and many have had to close their doors for good,” said Mayor Breed. “Small businesses are going to be such a critical part of our city’s recovery. As we look to the future of San Francisco, it’s critical that our City programs keep focusing on equity and serving those communities that have been historically disadvantaged. I’m proud that with the help of our partners, the generous contributions of Aneel Bhusri, and Joaquín Torres’s leadership at the Office of Economic and Workforce Development, we’ve been able to expand this fund and give businesses the resources that can help them survive this pandemic and come back even stronger.”

“The San Francisco Foundation and our donors are committed to supporting Black businesses that have been systemically excluded from accessing capital,” said Fred Blackwell, CEO of the San Francisco Foundation. “This fund will help Black residents build their wealth, and when Black, Indigenous, and people-of-color communities thrive, we all thrive.”

The AARLF was created in June 2020 in partnership with the San Francisco African American Chamber of Commerce and community lending partner Main Street Launch as part of the City’s comprehensive COVID-19 response for small businesses. The purpose of the Fund is to help stabilize San Francisco’s Black-owned and Black-serving small businesses by meeting urgent capital needs brought on by sudden revenue loss from business disruption resulting from COVID-19. The program offers zero interest loans of up to $50,000 for qualifying businesses, and no loan payments are due until 2022. 

Since the pandemic, San Francisco has directed over $24 million in grants and loans to support more than 1,200 small businesses, and recently announced a new $62 million plan to provide ongoing relief and recovery support to small businesses. The investments reflect the City’s commitment to ensuring a more equitable recovery and inclusive future economy. 

The African American Small Business Revolving Loan Fund complements San Francisco’s citywide COVID-19 financial relief package of grants and loans to support micro-enterprises and small businesses historically underserved by private banks and other traditional sources of financing. The City created its first zero interest loan program, the San Francisco Hardship Emergency Loan Program (SF HELP), in April 2020. SF HELP has now funded more than $12 million in loans and programming for businesses citywide. The AARLF followed this program design, and San Francisco has now successfully delivered over $4 million in grants and loans to Asian-Pacific Islander (API) businesses citywide and created the Latino Small Business Fund focused on providing similar support to Latino-serving small businesses.

“Stabilizing San Francisco’s Black-owned and Black-serving businesses is essential to our City’s ongoing cultural and economic vitality. These restaurants, hair salons, fitness studios, bike shops, and other businesses support and anchor our Black communities as important social and economic hubs,” said Assessor Joaquín Torres, who is a member of the City’s Economic Recovery Task Force. “The further expansion of the African American Revolving Loan Fund honors Black History Month by recognizing the racial inequities and adversities that have faced and sadly continue to face Black businesses here while at the same time lifting them up and valuing their contributions by investing in their futures.”

Nationally, one in five Black businesses have been impacted or closed due to the pandemic according to a May 2020 Working Paper published by the Stanford Institute for Economic Policy Research studying the impact of COVID-19 on small businesses. The Small Business Administration’s Paycheck Protection Program (PPP) awarded less than one quarter of one percent (0.25%) of the $3.2 billion in forgivable PPP loans issued in San Francisco to Black-owned businesses. Only 33 self-identified Black-owned businesses reported receiving PPP awards.

AARLF funds have been prioritized for long-standing San Francisco Black-owned and Black-serving businesses, especially those businesses most impacted by COVID-19 including those whose operations have been severely limited since the Stay at Home Order was issued in March such as hair salons, barber shops and other personal services, gyms and personal fitness. Funds can be used to pay for rent, payroll, equipment and machinery, inventory, furniture and fixtures, tenant improvements, and COVID-19 related expenses including marketing and improving online presence and reopening costs.

“Being a black business owner, the loan came through at the right time and in the right amount.  It couldn’t have come any better, I can’t even describe it, it meant a lot to me, it was a blessing,” said Lloyd Lacy, owner of Lacy’s Barber Shop in the Ocean View, Merced Heights, Ingleside neighborhood. “I was able to pay all my outstanding debts including my backed up rent and was able to put in the floor tiles that I had been sitting on for two years. I added new chairs, sinks,  mirrors and repainted my cabinets. If I hadn’t received the loan I would be at risk of losing my business.” 

Approximately $1.3 million from the $2.5 million in new funding will be used to leverage additional private sector funding to offer upwards of an additional 30 businesses zero interest loans. This increases the estimated total businesses that will benefit to 150, supporting an estimated 490 jobs. The remaining balance of $1.2 million will be used to provide full debt relief ranging from $5,000 to $50,000 for an estimated 30 longstanding businesses who have benefited from the fund. These debt relief payments will then allow for immediate recirculation, enabling additional loans to Black owned or serving small businesses. 

The AARLF received 391 applications during a two-week application period, totaling approximately $16 million in funding sought. An initial round of 40 eligible businesses were selected for awards and have now been awarded more than $1 million dollars. Fifty-six percent of recipients are women-owned businesses, far exceeding the approximately 34% of businesses in San Francisco that are women-owned.

“One of the most precious gifts we can give each other is the gift of being seen. Mayor Breed’s implementation of the historic African American Small Business Revolving Loan Relief Fund is a result of her seeing first hand the devastating effects COVID-19 and gentrification have had on Black owned small businesses in San Francisco,” said Nikki Cooper, owner of Two Jack’s Nik’s Place in the Western Addition. “Having access to capital from the AARLF has given me the very real support I need to continue operating my business during these challenging and uncertain times.”

Additional funds were added to the AARLF in August 2020 and a second round of 40 businesses was subsequently selected and moved forward in the loan process. These businesses have received approximately $500,000 in loan funding so far, and another $650,000 in loan requests has proceeded to the underwriting stage of the process. Currently, applicants with loans pending, approved, and funded now total over $2 million. A third round of approximately 50 additional businesses is now moving forward in conjunction with this latest investment in the fund. Funding will continue to be disbursed to eligible businesses by Main Street Launch. 

For more information about the City’s financial relief and assistance efforts to date, please visit oewd.org/impact.

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