HARLINGEN, Texas – Harlingen Economic Development Corporation has partnered with PeopleFund to launch a revolving loan fund that will provide $2 million in loan capital for eligible small businesses located within the Harlingen city limits.
Making the announcement, HEDC Board President Eric Ziehe, said that as part of the program, his organization will grant $500,000 to PeopleFund. PeopleFund will match that amount with $1.5 million, bringing the total amount of capital in the revolving loan to $2 million.
“This is a great opportunity, and we are honored to partner with PeopleFund,” Ziehe said.
“Small business owners can use these funds to expand their business, create more jobs if needed, and create a positive economic impact in our community.”
Beverly Loftus, HEDC Interim CEO, agreed.
“Loan recipients can use these funds to grow their business and create jobs,” said Loftus said.
“As the loans are deployed, we expect to see approximately 150 jobs retained/created over the course of 5 years. Investing in a revolving loan fund has the greatest impact in the long term because as loans are repaid, the capital would be re-deployed in the area.”
Gustavo Lasala is CEO of PeopleFund. He explained that PeopleFund is a nonprofit Community Development Financial Institution (CDFI) that creates economic opportunities for underserved communities by providing capital, resources, and tools necessary to build and grow a successful business.
Lasala said the nonprofit has locations throughout the state, including in the Rio Grande Valley.
“PeopleFund is excited about creating this revolving loan fund with HEDC. Harlingen’s location and diverse economy have a strategic important,” Lasala said.
“By helping small businesses in the area with affordable capital and free business coaching this fund will support the growth of a healthy vibrant economy that will benefit both Texas and the country.”
Lasala said PeopleFund will originate and service the loans to eligible Harlingen small businesses. He said all applications will be submitted and reviewed by PeopleFund, with local loan officers available to guide loan applicants and recipients through the process.
The revolving loan fund program will begin on April 1, 2023, and end on March 31, 2028. PeopleFund will continue to revolve and originate the loans and provide free technical assistance to eligible loan recipients beyond the end date.
Eligibility for the program includes the following:
1. Businesses with an existing loan with PeopleFund and an established physical address in the City of Harlingen
2. Businesses that do not have a loan with PeopleFund but have an established physical address in the City of Harlingen.
3. At least 60% of the loan proceeds shall be allocated to minority-owned businesses and at least 60% to low and moderate-income business owners.
PeopleFund loan interest rates typically range from 7% to 15% with 60 months average term.
The maximum loan amount disbursed under this fund will be $350,000.
At least 25% of the fund will be allocated to $50,000 and under loans.
Harlingen Mayor Norma Sepulveda said she was thrilled to see Harlingen EDC partnering with PeopleFund.
“Small businesses draw people from all over to Harlingen; these small businesses are the foundation of communities,” Harlingen Mayor Norma Sepulveda said.
“We want to support their growth, which will, in turn, produce economic opportunities for our community.”
Editor’s Note: The main image accompanying the above news story shows downtown Harlingen. Photo credit: Harlingen Economic Development Corporation.
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