Covid-19 Grants and Loans for Small Business in California
COVID-19 is wreaking havoc on the global economy, and causing massive disruptions to people's lives and livelihoods, as well as social and economic institutions across the globe.
According to a recent Census poll of firms with up to 500 employees in California (U.S.A), 56% of small enterprises had "significant unfavorable" consequences from the Covid-19 pandemic.
Government assistance to small enterprises will be vital to the state's improving economy as they struggle to cope with the repercussions of COVID-19.
One-third of California's employment is recruited by extremely small enterprises with less than 50 people, accounting for 95% of the state's labour.
As the economy heals, Californians may need financial aid to operate their small businesses and safeguard their employees and staff.
We recognize that the economic devastation caused by COVID-19 will take time to recuperate. However, these small firms can take advantage of certain ongoing CA relief grants and loans funding possibilities in the interim.
In this article, we have covered CA grants and loans opportunities for small business in California, USA. Let’s take a look at the content that we’ll cover further:
- Understanding Small Business and Nonprofits
- Understanding Grants and Loans
- Required Documents
- California Small Business COVID-19 Relief Grant Program
- Overview: Grants and Loans List
- How Deskera Can Assist You?
Let’s learn!
Understanding Small Business and Nonprofits
Following we will learn about small businesses and nonprofits that can apply for grants and loans:
Small Business
A small business is a sole proprietorship, privately held corporation, or partnership, with fewer employees and annual revenue than a corporation or a regular-sized company.
Non-Profits
The term refers to a non-profit organization that isn't solely concerned with producing revenue. Rather, it's a group formed with the idea of furthering a social cause or reaching a common goal and objective.
Understanding Grants and Loans
A Grant is — rewarded money toward the cost of the project that is non-repayable.
Moreover, grants are frequently supported by the government, and they focus on specific types of enterprises and programs to help them flourish.
Governments Trusts, Corporations, or Departments offers grants to:
- Academic Institutions
- Individuals
- Non-Profits
- Businesses
Individuals and enterprises are often financed through banks, however lending institutions or individuals (for example, friends and close relatives) may also be able to help.
Moreover, a formal signed contract should be created in this situation to ensure that the close family or friend is reimbursed.
The borrower, on the other hand, is required to repay the money plus interest within a given time period, regardless of who disburses the loan.
However, if the debtor fails to repay the loan, the lender may be able to confiscate the borrower's assets if collateral was provided. Note that collateral could be used as security if the debtor fails to repay the loan.
Even when a grant opportunity arises, it is exceedingly competitive and hard to acquire. If there is a choice between grants and loans, the majority of enterprises will pick loans to receive the capital they need.
Following we have discussed advantages of grants and loans. And, you can apply for what seems right for your requirement and business:
Grants Advantages
Grants offer a number of benefits that anybody in need of funds should consider. Following we have discussed some important advantages of grants. Check them:
Free of Repayment Concern:
The most significant advantage of grant financing is that the money you get is not required to be repaid - this contribution can lead to significant savings on your project or allow you to invest in other sectors.
As funding projects are focused on specific activities, they might inspire you to build aspects of your organization that you may not have addressed.
It includes assessing your environmental impact or hiring a consultant. These projects can help firms become more efficient, better for the environment, and explore new opportunities.
Moreover, once you have been rewarded with a grant amount, you are not bound with any conditions. You do not have to worry about any paying interest, debt load, or monthly payment when it comes to grants.
Also, it is worthy to note that the main distinction between a loan and a grant includes— repayment. The latter has nothing to do with repayment and offers more benefits than a loan.
Free from Any Risks:
The best thing about grants is that— grants do not hold any risks. You can simply obtain the funds you require with this approach.
However, in case you fail to pay the loan amount back. Then, you will place your assets and credit score at jeopardy. Therefore, grants work best for you and will solely benefit you or your business.
Grants Disadvantages
Following we have discussed some major disadvantages associated with grants. Check them:
- Grants only cover a portion of the cost of your project, often between 10% and 30%, while certain grants might go up to 50%. You are in charge of obtaining the remaining funds required for completing.
- Grants can be fiercely competitive as everyone wants free capital. Your project must provide excellent value for money and align with the grant's objectives.
- Grants are limited in scope and are frequently only available for one of two purposes: the purchase of equipment (capital finance) or consultation, which includes R&D initiatives (known as revenue funding). They can't be included in a business promotion or working capital.
- Grants are frequently denied to start-up businesses. Grants are typically supported by public dollars, so organization must guarantee that the projects they sponsor provide good value for money, which can be difficult to determine when your company lacks a track record. Most grants will support companies that have been in business for at least two years.
- Grants are usually conditional - they're intended to help businesses grow, so you may be required to commit to creating jobs at a rate determined by the grant provider.
Loans Advantages
Taking out a loan rather than asking for a grant has some advantages. Let’s check:
- It might surprise your but loans offers broader opportunities than grants. You may find certain advantages when it comes to grants. But there are certain aspects that provide loans an upper hand.
- If we talk about grants, then the number of funds available is restricted and limited. However, when it comes to loans, then you have wider options.
- Private lenders, Banks, and people, on the flip side, can provide loans. As a result, you'll have more chances to obtain the financial aid you require.
- All of the lending programmes we recommend to businesses are non-profit. Their loans are often unsecured, which implies you won't be dealing up any type of collateral (such as a house or car) to guarantee them.
- Despite being largely excluded from grant options, consumer enterprises such as cafés and retail stores can get business loans.
- Loan money could be used for nearly everything in a firm, including marketing and office equipment, which aren't covered by grants. It can also be utilized as working capital in order to improve a company's cash flow.
- Unlike a bank, organizations like the Business Enterprise Fund aren't attempting to make a profit, so while they do charge an interest rate, it's only to make sure the system continues to operate and that they have enough funds to hand out. These interest rates are usually set, which means they won't change throughout the course of the loan, allowing you to calculate your repayments at any time.
Loans Disadvantages
Following we have discussed some major disadvantages associated with loans. Check them:
- The most significant downside of a business loan is that you should be ready to return whatever you acquire, frequently with interest accrued. This can put a financial hardship on a business, especially for small consumer businesses and start-ups.
- A business loan, like any other loan, can be denied, especially if you have already gone bankrupt or are in financial distress.
- Because the loans are unsecured, the rates of interest on certain loan programmes can be much greater than those on a bank loan. Companies that have a strong relationship with their lenders may find that talking to their bank manager instead of getting a loan is more cost-effective.
Required Documents
Following we have listed some of the crucial documents that you need to provide to apply for grant or loan. Although, make sure to check all details as it may vary.
Check the list of required documents:
1. Application Certification: A signed certification that attests to your company's legitimacy.
2. Financial Information for a Business:
a. 2019 Federal Tax Return – in a digital form, such as PDF/JPEG or another permitted upload format, for online uploads.
b. A copy of the company's formal filings with the California Secretary of State or local municipalities, such as Certificate of Organization, Articles of Incorporation, Fictitious Name of Registration, or Government-Issued Business License, if applicable.
3. A government-issued photo ID, such as a driver's driver's license, is required.
California Small Business COVID-19 Relief Grant Program
Let’s learn the details of the COVID-19 CA Relief Grant Program and funding structure:
About the Grant Program
- This operation is funded by the state of California. It is administered by the California Office of the Small Business Advocate (CalOSBA)
- There is no "first come, first served" policy in place for this programme
- Lendistry is the sole entity designated as the intermediary of the California Small Business COVID-19 CA Relief Grant Program
- Grants are available from $5,000 to $25,000 per eligible small business and nonprofits
- Yearly gross revenue must be a minimum of $1,000 and a maximum of $2.5 million
- Owners of several franchises, enterprises, locations, and the like will only be evaluated for one grant and must apply for the one with the highest revenue
- You will be considered for both rounds if you submit an application form; please only submit once
- Applying to multiple organizations will cause your application to be evaluated more slowly
Application Portal — www.CAReliefGrant.com
Grant Amount and Funding Structure
Following we have showcased the grant amount and funding structure. Have a look:
Eligible Business Gross Revenue (2019 taxable year) | Grant Award Available per Business |
Annual gross revenue $1,000 to $100,000 | $5,000 grant |
Annual gross revenue greater than $100,000 up to $1,000,000 | $15,000 grant |
Annual gross revenue greater than $1,000,000 up to $2,500,000 | $25,000 grant |
Overview: Grants and Loans List
Following we have discussed several grants and loans that will help your small business to operate smoothly in this pandemic.
Let’s learn:
California Paid Family Leave Grants
Objective:
Businesses affected by the PFL program will incur additional costs such as training and upskilling operating people to cover the responsibilities of the PFL employee, recruiting and training extra staff to cover the roles and responsibilities of the PFL employee, and marketing, recruiting and selection, and training costs to encompass these activities.
Description Details:
Family leave is supported by grants from the California Labor and Workforce Development Agency (LWDA) and the California Employment Training Panel.
Furthermore, small firms with less than 50 employees can also apply for a $2,000 award. It helps to cover expenses incurred when an employee uses the state's Paid Family Leave Program.
Additionally, organizations with 51 to 100 employees can qualify for $1,000 per employee. This is currently an ongoing project. However, the current round's closing date is February 8.
Important Notifications
Check the following notifications and other information associated with grants:
Important Dates | ||
Application Deadline | Expected Award Announcement | Period of Performance |
February 8, 2022 | March 25, 2022 | June 1, 2022 |
Funding Details | ||
Total Estimated Available Funding | Expected Number of Awards | Estimated Amount per Award |
$1,000,000 | Dependent | $250,000-$500,000 |
- Letter of Intent Required?: No
- Requires Matched Funding?: No
- Funding Source: State
- Funding Method: Reimbursement(s)
Application Sources
Before applying for a grant, state agencies/departments urge that you read the whole grant guidelines.
For questions about this grant, contact:
ETP Grant Inquiries, 1-916-327-5640, ETPGrantInquiries@etp.ca.gov
Kern County CA Relief Grants
Description Details:
Kern County, California, is providing a grant to local companies that have yet to obtain disaster CA relief grant funds. The current round has a budget of around $1 million, which will be dispersed in $2,500 scholarships.
As of 2019, businesses must have less than $50,000 in revenue and no more than five full-time employees. They must also be able to demonstrate pandemic-related damages and a lack of assistance from existing humanitarian organizations.
Grants will be given out till funds gets depleted. However, the initiative will begin in mid-February, and firms are encouraged to pursue it as soon as possible.
Information Sources
EnrichHER
Entrepreneurs who run small businesses are under immense pressure to run and expand their operations as inflation, COVID-19, and cutbacks continue to disrupt today's market.
Fortunately, EnrichHER Grant, the only Black woman-owned fintech lender is a lifesaver for founders in need of funding for operational necessities.
Description Details:
EnrichHER, a fintech lender, is holding its first $5,000 small business award competition for women and entrepreneurs of color. It will further launch its second $5,000 small business prize competition later this month.
Funds can be utilized for a number of operational reasons. It includes elements such as a marketing campaign, purchasing new machinery, or payroll assistance.
Information Notification
EnrichHER will accept applications at: enrichher.com/grant from Thursday, January 20, 2022 to Thursday, February 3, 2022.
And, on March 31, 2022, a grant winner will be chosen and announced. Applicants must be a woman or person of color-owned businesses in the United States.
The deadline for applications is February 3rd.
Santa Clara County Microbusiness COVID-19 CA Relief Grant Program
Description Details:
In Santa Clara County, California, a new grant program was established to help local microbusinesses. The California Microbusiness COVID-19 CA Relief Grant Program gave the $2.4 million grant (MBCRG).
Enterprise Foundation, a community partner, will run the programme and select the microbusinesses that will earn $2,500 grant assistance to help counterbalance the pandemic's negative effects.
Furthermore, a total of 875 local firms will benefit from the cash. Emphasis will be given to veteran-owned businesses, minorities-owned businesses, women-owned businesses, and businesses facing systematic financial issues.
A company must have less than five employees as well as less than $50,000 in total revenues to be eligible. Applications will be released soon in the upcoming weeks.
Information Notification
For information on how to apply for this assistance in your area, go to your county's website.
California Dream Fund
Description Details:
Small enterprises that meet the criteria can receive grants of up to $10,000 from the California Dream Fund. Your company must participate in extensive consulting and training to be qualified.
California offers a chain of technical assistance facilities for small enterprises. Locate and contact your local small business centre for further information.
Criteria for the California Dream Fund
- Entrepreneurs who wish to participate must finish a defined business training programme, one-on-one consulting, and a viable company plan.
- "After July 1, 2019, the participating entrepreneur must have created a legal entity."
- The definition of a new business start must be met by participating entrepreneurs.
Information Notification
California Nonprofit Performing Arts Grants Program
Grants of up to $75,000 may be available to non-profit performing arts organizations. This money can be used by businesses to:
- Contributions to a centralized payment service or payments to a centralized payment service.
- Healthcare benefits, Payroll, insurance premiums, and paid leave benefits, are all examples of employee expenses.
- The employment, training, and development of employees are all critical components of the work.
- Additional operating costs or staff requirements
Small Business License Fee Exemption (State)
Description:
Restaurants and bars licensed by the state's Department of Alcoholic Beverage Control (ABC). It also includes barbering and cosmetology establishments regulated by the Department of Consumer Affairs, and are eligible for two years of fee remission.
Information Updates
Review bar and restaurant guidelines:
www.abc.ca.gov/..requirements-and-guidelines/
Barbering and cosmetology FAQs are here:
www.barbercosmo.ca.gov/../fee_relief_faq.pdf
Apply
Restaurants and bars will apply through ABC:
www.abc.ca.gov/.../renewal-fee-waiver/
The fee waiver for barbering and cosmetology licenses will be applied automatically.
California Rebuilding Fund (State)
Description:
This programme provides loans up to $100,000 or 100% of a firm's average monthly income for the three months preceding the COVID-19 outbreak, whichever is less.
Information Detail:
- California's small businesses will benefit from a loan programme.
- Companies that employed 50 or fewer full-time employees (FTEs) and had gross revenues of less than $2.5 million in 2019 are eligible.
- Loans must be repaid over a 3- or 5-year period with a set annual interest rate of 4.25 percent.
Criteria Details:
Eligible businesses have less than 50 full-time equivalent employees and total revenues of $2.5 million or less in 2019. Organizations must have suffered a clear financial hardship as a result of COVID-19 that has had a meaningful impact on the activities to be eligible.
Note: Small business owners in California are the target audience.
Notification Updates:
Go to www.connect2capital.com/p/californiarebuildingfund/ to start the pre-application process.
Application Deadline: Open( no deadline has been posted yet)
COVID-19 Economic Injury Disaster Loan (EIDL)
The US Small Business Administration (SBA) is no longer accepting new COVID-19 EIDL applications. The Small Business Administration (SBA) intends to accept requests for
- Increasing the loan amount
- Reconsideration of a loan that was previously denied
- An appeal of a denial of a request for reconsideration
- For further information, go to the COVID-19 EIDL webpage of the US Small Business Administration.
Information Update:
Visit U.S. SBA’s COVID-19 EIDL website for more information.
Social Entrepreneurs for Economic Development Grant
Description:
The SEED 2 Grant has been expanded for Fiscal Year 21/22, according to the Employment Training Panel (ETP), the California Workforce Development Board, and the Labor and Workforce Development Agency.
Moreover, the goal of SEED 2 is to encourage immigrants and Limited English Proficient (LEP) people who experience substantial employment challenges to start businesses.
Note: Small business owners in California are the target audience.
Application Update
Cal-E-Grants is the only way to submit your application. It's advisable to read through the Solicitation for Proposal & Forms before registering.
Preview Solicitation for Proposal & Forms
SEED 2 Cal-E-Grants (Demonstration Project) User Guide
SEED 2 Cal-E-Grants (Entrepreneurship Project) User Guide
Notification Update:
Application deadline: Tuesday, February 8, 2022
Important Dates | |
Event | Date |
Application Open | January 11, 2022 |
Proposal Due | February 8, 2022 by 5:00 p.m |
Announcement of Awards | March 25, 2022 (March Panel) |
Estimated Project Start Date | June 1, 2022 |
COVID-19 Disaster Relief Loan Guarantee (State)
Description Details:
Small companies in low-income or immigrant neighborhoods that do not qualify for federal disaster relief can apply for money through the Disaster CA Relief Loan Guarantee Program.
Criteria Information:
Businesses with less than 750 workers in California that have been impacted by COVID-19, as well as qualified charitable organizations, may be eligible.
Notification Update:
Visit ibank.ca.gov/small-business/participating-lenders/ to find an operating lender;
Email COVID19Loan@ibank.ca.gov to contact the California Infrastructure and Economic Development Bank's Small Business Finance Center.
U.S. Small Business Administration Debt Relief Assistance (Federal)
Description Detail:
During the COVID-19 outbreak, this program offered debt relief to current SBA borrowers.
Criteria Information:
Borrowers who have been approved for SBA loan programmes 7(a), 504, and microloans through September 27, 2020, are qualified.
www.sba.gov/..../sba-debt-relief
Notification Update:
If you have any questions concerning SBA loan assistance, contact your lender.
California IBANK
Financial Development Corporation (FDC) partners with iBank across the state to help firms get a 95% assurance on a bank loan for disaster assistance.
- California's entire state is served.
- Small business owners are the target audience.
Notification Updates:
Application Deadline: Open (no deadline has been posted yet)
Non-Eligible Business
1. Companies that do not have a physical presence in California
2. Non Profit organizations that aren't 501(c)(3), 501(c)(19), or 501(c)(6) (6)
3. Elected official offices or government institutions (other than Native American tribes)
4. Businesses largely involved in political or lobbying operations (whether or not they are 501(c)(3), 501(c)(19), or 501(c)(6) organizations)
5. Investors, passive firms, and investment organizations that submit a Schedule E on their personal tax return
6. Churches and other religious organizations (whether or not they are 501(c)(3), 501(c)(6), or 501(c)(19)), other than a school, child care facility, or other educational business affiliated where I the school, child care facility, or educational business generates more than 50% of the gross annual revenue, and (ii) the grant will be used only for qualified costs and expenses directly related to the school, child care, or other educational business.
7. Banks, finance firms, and factoring companies are examples of financial businesses that are largely involved in the lending business.
8. Companies that engage in any criminal action under federal, state, or municipal law
9. Companies of a prurient sexual nature, including businesses that provide live performances of a prurient sexual nature and businesses that derive more than de-minimize gross revenue from the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
10. Rent-to-own businesses and verified cashing businesses are examples of enterprises that participate in any socially undesirable conduct or activity that could be deemed predatory in nature.
11. Businesses that limit customer numbers for reasons other than capacity.
12. Businesses that are speculative
13. Businesses in which any holder of more than 10% of the equity interest has been convicted of or had a civil judgment rendered against them for the commission of fraud or a criminal offense in connection with obtaining, trying to obtain, or performing a public service within the previous three years, or has had any form of parole or probation (including probation before judgment) commenced against them for the commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public service (federal, state or local) (ii) is currently indicted for or otherwise criminally or civilly charged by a government entity (federal, state, or local) with the commission of any of the offenses enumerated in subparagraph I above, or (ii) is currently indicted for or otherwise criminally or civilly charged by a governmental agency (federal, state, or local) with the commission of any of the offenses enumerated in subparagraph (I) above
14. Companies that are "affiliated" (as defined in 13 C.F.R. 121.103).
15. Multiple company entities, franchises, locations, and the like are not eligible for multiple grants and can only apply once with their eligible small business with the highest income.
How Deskera Can Assist You?
As a business, you must be diligent with employee leave management. Deskera People allows you to conveniently manage leave, attendance, payroll, and other expenses. Generating payslips for your employees is now easy as the platform also digitizes and automates HR processes.
Key Takeaways
Following we have discussed some major points for your future reference. Let’s take a look for future reference:
- A Grant is — awarded money toward the cost of the project that is non-repayable.
- The best thing about grants is that— grants do not hold any risks. You can simply obtain the funds you require with this approach.
- The borrower, on the other hand, is required to repay the money plus interest within a given time period, regardless of who disburses the loan.
- Small firms with less than 50 employees can also apply for a $2,000 award. It helps to cover expenses incurred when an employee uses the state's Paid Family Leave Program.
- EnrichHER, a fintech lender, is holding its first $5,000 small business award competition for women and entrepreneurs of color.
- The California Microbusiness COVID-19 CA Relief Grant Program gave the $2.4 million grant (MBCRG).
- Small enterprises that meet the criteria can receive grants of up to $10,000 from the California Dream Fund. Your company must participate in extensive consulting and training to be qualified.
- California rebuilding fund program provides loans up to $100,000 or 100% of a firm's average monthly income for the three months preceding the COVID-19 outbreak, whichever is less.
- The goal of SEED 2 is to encourage immigrants and Limited English Proficient (LEP) people who experience substantial employment challenges to start businesses.
- Small companies in low-income or immigrant neighborhoods that do not qualify for federal disaster relief can apply for money through the Disaster CA Relief Loan Guarantee Program.
- Financial Development Corporation (FDC) partners with iBank across the state to help firms get a 95% assurance on a bank loan for disaster assistance.