New $10-million fund to help small businesses will focus on Sacramento's disadvantaged neighborhoods
Small businesses and non-profits affected by the Covid-19 pandemic and shutdown will be able to qualify for forgivable loans of up to $25,000 through a program approved unanimously Tuesday by the City Council.
The Small Business Recovery Program will be funded by $10 million of the $89 million the City received from the federal stimulus bill, known as the CARES Act.
“This sends the right signal to our business community that help is on the way,” said Mayor Darrell Steinberg.
So far, the Council has made commitments for $34 million in CARES act funds to be spent on categories that include small business assistance, workforce training, youth enrichment, family services, homeless services and rapid rehousing and the arts, creative economy and tourism.
Another $55 million remains to be allocated for specific projects, though it has been roughly divided into categories, including $8 million in additional assistance for small businesses.
Businesses physically located in the City of Sacramento who had 25 or fewer employees as of March 1 will be eligible for the forgivable loans approved Tuesday, including locally owned franchises if the owner has less than three franchises in the city. Home-based businesses won’t be eligible unless they are child care businesses or have more than three full-time employees.
The money will be distributed with a focus on economic equity, with 75 percent of the money earmarked for businesses in disadvantaged communities. City staff also set a goal of having 25 percent of the funds go to micro-enterprises, defined as those with fewer than five employees.
The new program follows a $1-million, zero-interest loan fund launched by the City in March that was quickly subscribed under overwhelming demand.
City staff will get the word out well in advance of the application deadline by working with ethnic chambers, business improvement districts and community groups around the city. The application period is expected to run from June 29 to July 13, and the money is expected to go out to small businesses by August 11.
The federal government requires that expenditures under the CARES Act must go to mitigate the affects of Covid-19 and the shutdown of much of the economy.
Leslie Fritzsche, the City’s Economic Investment Manager, said loans would be distributed throughout the city, with points given to long-time businesses and those whose owners are low to moderate income. The loans will be forgivable after one year if the business remains open, has a business plan and has retained 75 percent of the jobs it had in March 2020.
Want to learn more? The City is hosting a webinar to learn about the forgivable loan program, eligibility requirements, application process an how to apply. Join us on Wednesday, June 24 at 2:00 p.m. Register here.
Find more information on the program here.
Businesses interested in learning more about the loan program are encouraged to call the Small Business Hotline at (916) 808-7196 or smallbusiness@cityofsacramento.org.
Stay up to date on COVID-19 relief announcements by signing up for emails from the Office of Innovation and Economic Development here.
