The grant will pay for outreach efforts for up to 500 local businesses, face-to-face meetings with executives, seminars with area chambers of commerce and economic development agencies and assistance in helping companies complete SBA applications.
The workforce board plans to target companies that are stable and ready to expand, but have had difficulties in obtaining financing to make new purchases and hires.
SBA programs could help qualifying businesses by covering interest payments for loans or other financing, while the companies might use the extra cash to pay workers, officials said.
“The goal is to help local companies that may need capital that hopefully are in a position to grow with an infusion of capital,” said Don Nakamoto, labor market specialist for the workforce board.
The federal agency initially delayed delivery of funds to the board because it did not qualify as a tax-exempt nonprofit, Nakamoto said.
The board is a private nonprofit created by the federal Workforce Investment Act of 2000, and provides counseling and training services for job seekers in Burbank and Glendale, he said.
It also works with area businesses to spur job creation and economic expansion, Nakamoto said.
The SBA took two months to determine that the board met its requirements for receiving the outreach program funds, he said.
The board has already begun its outreach efforts, hoping to encourage businesses to apply for programs that could allow them to make strides during the economic downturn, said Damu Courtney, project manager of the outreach campaign for the board.
One program available through the agency helps growing businesses by covering up to $35,000 in debt payments for up to six months, allowing participants to use cash freed up through the program to pay for new equipment, hires or facilities, Courtney said.
“It gives the businesses an ability to create some liquidity for themselves,” he said.
Another program could help businesses buy new properties with loan terms that are far more favorable than they might be through conventional bank financing, with down payments of 10% rather than about 30% of a property’s value, he said.
A local business recently took advantage of the program to buy property that was twice as expensive as what it would otherwise have been able to afford with other financing options, Courtney said.
“It actually allowed them to not only buy a bigger space, but it allowed them to increase their workforce by 20%,” he said.
