This post is one in a series, Sacramento for All, that will highlight what the City of Sacramento is doing under the leadership of Mayor Darrell Steinberg to lift all its neighborhoods and residents.

In total, the City has allocated about $80 million in Measure U and CARES Act funding over the past 18 months to help struggling neighborhoods, provide activities and training for youth, help Sacramento families, reduce homelessness and create more affordable housing. Another $55 million remains to be programmed for such categories by the end of the year.

Starting Monday, June 29, small businesses hurt by the Covid-19 pandemic can begin applying for assistance through the City’s new forgivable loan program.

The Small Business Recovery program is funded by $10 million in federal CARES Act funds. The City Council is expected to vote to spend another $10 million Tuesday, June 30 to help small businesses.

Seventy five percent of the new small business loans, or $7.5 million, is reserved for businesses or non-profits in economically disadvantaged neighborhoods. 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.

“We have carefully crafted the program using an equity lens so that the bulk of the resources will go to businesses in neighborhoods that need help the most.,” said Mayor Darrell Steinberg.

The program will provide up to $25,000 in forgivable loans to businesses and nonprofits located in the city of Sacramento to assist with financial needs and in the retention of employees.

Businesses and non-profits physically located in the City of Sacramento that had 25 or fewer employees as of March 1 will be eligible for the forgivable loans, 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 application period will be from 9 a.m. Monday, June 29 through 5 p.m. Monday, July 13. Once the application window closes, applications will be screened using specific criteria followed by a lottery/random draw. Funding is expected to be disbursed to selected businesses in mid-August.

Loans will be forgivable after one year if the business submits a business plan within 6 months of receiving the loan and meets two of three of the following criteria: remains open, completes ten hours of technical training and retains 75 percent of the jobs it had in March 2020.

Awarded businesses that do not meet the forgivable loan requirements will be required to repay the loan with 0% interest and will pay $100 a month for every $5,000 borrowed.

Find program details and criteria below:

Eligibility

For-profit or non-profit organization that had up to 25 full-time equivalent employees (“FTE”) during an average week in 2019;

Home-based business if it has 3 or more FTEs during an average week in 2019, or if it is a child-care provider;
Franchise business as long as the franchisee does not own more than 2 franchise businesses;
Physical establishment within the City of Sacramento
Business or nonprofit must have been in business 12 months as of March 1, 2020;
Projected annual revenues of less than $3 million in gross revenue for 2020;
Demonstrated financial hardship due to COVID-19 health restrictions, such as a loss in revenue;
Cannot be a business owner that has previously been awarded funding for the same business in the City’s original Small Business Economic Relief Fund COVID-19 relief loan program;
Be in good standing with the City of Sacramento (e.g., current on bills, no liens or judgments, etc.)
Comply with the spirit of the City’s non-discrimination policy 
Be in compliance with all City and State employment requirements

Forgivable loan requirements

Required to submit a business plan within 6 months of receiving funds

Loan Forgiveness after 1 year based on 2 of 3 of the following criteria:
- 75% of employment level had in March 2020
- Business remains open
- Completion of 10 hours of technical assistance
- Reporting of Expenditures & FTEs

Applications will be accepted online at www.cityofsacramento.org/bizloans

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.