News

Struggling small businesses could get boost from Newsom's proposed $227B budget

Local and state have offered grants, loans and programs to promote business during shutdown

Bikers ride past Camper in downtown Menlo Park on May 12, 2020. Photo by Magali Gauthier.

As small businesses continue to struggle under the weight of renewed COVID-19 restrictions, local and state governments have had to step in to provide some aid in the form of immediate economic relief or other programs to help boost business.

On Jan. 11, Gov. Gavin Newsom announced a $575 million grant program for small businesses and nonprofits as part of his $227 billion budget proposal to the state Legislature. It's essentially a second round of an existing program, whose deadline was extended to give more business owners time to apply. The money would give small businesses grants of between $5,000 and $25,000, the governor said at a press conference.

An additional $71 million will be directed towards waivers of license fees to assist businesses that haven't been able to operate at full capacity during the pandemic — particularly hair salons, manicurists, bars and restaurants.

Other relief for businesses include workforce-development support including: $430 million towards California Competes Tax Credit, incentivizing businesses to stay and grow in the state; $100 million to the Main Street Hiring Tax Credit, which gives businesses a $1,000-tax credit for each employee rehired; $100 million for small business loans through the California Infrastructure and Economic Development Bank; and $100 million for sales tax exclusions.

The new statewide relief package, however, is only a budget proposal and needs to be approved by the state legislature. In the meantime, city and county governments have already sought programs to help local small businesses.

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In Santa Clara County, the Board of Supervisors unanimously approved a $6 million investment in the California Rebuilding Fund, which provides small businesses loans of up to $100,000 with a three- to five-year term and a 4.25% interest rate.

Supervisor Joe Simitian, who made the proposal with Supervisor Susan Ellenberg, has expressed hopes to push for an additional investment at the Jan. 12 board meeting.

"These funds are available now and are relatively easy to apply for," Simitian said. "I know people are hurting, and these funds are a step in the right direction."

San Mateo County approved something similar at the beginning of the pandemic by investing $3 million for emergency funding in partnership with the Silicon Valley Community Foundation.

City governments have also been keen to support small businesses and boost the local economy since the beginning of the pandemic.

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In Mountain View, small business owners and landlords were offered zero-interest loans of up to $10,000 last year through the city's Small Business Resiliency Program and the Small Landlord Relief Program.

Similarly, the city of Palo Alto provided an initial contribution of $500,000 in April to jumpstart its Small Business Relief Fund, which continues to [ebcf.org/donate/palo-alto-relief-fund/ accept donations that will go towards local businesses.

In addition to the relief fund, Palo Alto started a grant program last summer that provided up to $10,000 to 50 local businesses using the city's general fund. The city started a second round of the grant program in October and has yet to decide if it will continue the program in the new year.

"Whether we hold a third phase in 2021 remains to be seen and depends on the amount of private donations received," the city states on its website. "As of January 2021, we have no information to share regarding a possible third phase."

Aside from immediate financial relief, cities have also started programs that encourage shoppers to visit their local retail and restaurants.

Menlo Park, Mountain View, Los Altos and Palo Alto, among many other cities in the Bay Area, have closed streets around commercial strips to promote outdoor dining and retail; though the program isn't as effective since current health orders restrict outdoor eating, and some streets have been reopened.

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Struggling small businesses could get boost from Newsom's proposed $227B budget

Local and state have offered grants, loans and programs to promote business during shutdown

by / Palo Alto Weekly

Uploaded: Sat, Jan 16, 2021, 8:26 am
Updated: Tue, Jan 19, 2021, 11:37 am

As small businesses continue to struggle under the weight of renewed COVID-19 restrictions, local and state governments have had to step in to provide some aid in the form of immediate economic relief or other programs to help boost business.

On Jan. 11, Gov. Gavin Newsom announced a $575 million grant program for small businesses and nonprofits as part of his $227 billion budget proposal to the state Legislature. It's essentially a second round of an existing program, whose deadline was extended to give more business owners time to apply. The money would give small businesses grants of between $5,000 and $25,000, the governor said at a press conference.

An additional $71 million will be directed towards waivers of license fees to assist businesses that haven't been able to operate at full capacity during the pandemic — particularly hair salons, manicurists, bars and restaurants.

Other relief for businesses include workforce-development support including: $430 million towards California Competes Tax Credit, incentivizing businesses to stay and grow in the state; $100 million to the Main Street Hiring Tax Credit, which gives businesses a $1,000-tax credit for each employee rehired; $100 million for small business loans through the California Infrastructure and Economic Development Bank; and $100 million for sales tax exclusions.

The new statewide relief package, however, is only a budget proposal and needs to be approved by the state legislature. In the meantime, city and county governments have already sought programs to help local small businesses.

In Santa Clara County, the Board of Supervisors unanimously approved a $6 million investment in the California Rebuilding Fund, which provides small businesses loans of up to $100,000 with a three- to five-year term and a 4.25% interest rate.

Supervisor Joe Simitian, who made the proposal with Supervisor Susan Ellenberg, has expressed hopes to push for an additional investment at the Jan. 12 board meeting.

"These funds are available now and are relatively easy to apply for," Simitian said. "I know people are hurting, and these funds are a step in the right direction."

San Mateo County approved something similar at the beginning of the pandemic by investing $3 million for emergency funding in partnership with the Silicon Valley Community Foundation.

City governments have also been keen to support small businesses and boost the local economy since the beginning of the pandemic.

In Mountain View, small business owners and landlords were offered zero-interest loans of up to $10,000 last year through the city's Small Business Resiliency Program and the Small Landlord Relief Program.

Similarly, the city of Palo Alto provided an initial contribution of $500,000 in April to jumpstart its Small Business Relief Fund, which continues to [ebcf.org/donate/palo-alto-relief-fund/ accept donations that will go towards local businesses.

In addition to the relief fund, Palo Alto started a grant program last summer that provided up to $10,000 to 50 local businesses using the city's general fund. The city started a second round of the grant program in October and has yet to decide if it will continue the program in the new year.

"Whether we hold a third phase in 2021 remains to be seen and depends on the amount of private donations received," the city states on its website. "As of January 2021, we have no information to share regarding a possible third phase."

Aside from immediate financial relief, cities have also started programs that encourage shoppers to visit their local retail and restaurants.

Menlo Park, Mountain View, Los Altos and Palo Alto, among many other cities in the Bay Area, have closed streets around commercial strips to promote outdoor dining and retail; though the program isn't as effective since current health orders restrict outdoor eating, and some streets have been reopened.

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