Federal and State Resources
1/11/2021: PPP Reopens for Applications:
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The PPP has received another round of funding and applications are now open for small businesses with a maximum of 10 employees or for a loan of $250,000. The PPP will then open up applications to other eligible small entities, that together with their affiliates (if applicable), have 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors.
SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.
• PPP loans have an interest rate of 1%.
• Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
• Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
• No collateral or personal guarantees are required.
• Neither the government nor lenders will charge small businesses any fees.
How to Apply:
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
If you wish to begin preparing your application, you can download the following PPP borrower application forms to see the information that will be requested from you when you apply with a lender:
For more details, visit the Small Business Administration (SBA) website: Paycheck Protection Program (sba.gov)
Main Street Lending Program: Established by the CARES Act, the Main Street Lending Program supports lending to U.S. small and medium-sized businesses who were financially affected by COVID-19. The Federal Reserve Bank of Boston administers the program under the Federal Reserve. The lending program is fully operational, ready to purchase participations in eligible loans that are submitted to the program by registered lenders. Learn more about this this program here
Economic Injury Disaster Loan Program: The SBA has reopened its application form for the Economic Injury Disaster Loan (EIDL) Program. This program provides flexible working capital loans at a rate of 3.75% (2.75% for nonprofits) with a term of up to 30 years. Applicants also are eligible for an advance amount of up to $10,000 ($1,000 per employee).
SBA Debt Relief: This is another program created by the CARES Act. As part of SBA's debt relief efforts, the SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months. The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020. Learn more about SBA Debt Relief click here.
Express Bridge Loans: Allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. Terms : Up to $25,000; Fast turnaround. Learn more about Express Bridge Loans click here.
Federal Tax Credit to Cover the Cost of Paid Sick Leave: Two new refundable federal payroll tax credits to help small and medium-size businesses cover the cost of providing coronavirus-related leave for employees. These federal credits are designed to immediately and fully reimburse small and medium-size businesses for the cost of paid leave. The JEDE Committee, in collaboration with the Assembly Committee on Revenue and Tax, has requested the Governor’s Office of Emergency Services to provide guidance on how this tax credit applies to California businesses, which may have already laid workers off. More information about these new tax credits are available under “New Releases” on the IRS’ COVID-19 webpage: https://www.irs.gov/coronavirus
Download a guide to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The California Rebuilding Fund (the “Fund”) is a public-private partnership that aggregated funding from private, philanthropic, and public sector resources. The Fund is backed by California’s iBank Loan Guarantee Program, which covers 95% of any losses, or will benefit from a $25 million “first loss commitment.” This guarantee makes loans available to small businesses that might be available through conventional lenders.
- Have fewer than 50 employees
- Direct economic hardship due to COVID-19
- Annual revenue of less than $2.5 million
Key Loan Terms:
- Maximum loan size of $100,000
- 60-month loan term, interest-only payment in first 14 months
- Interest rate of 4.25%
How to Apply:
- All interested businesses will apply for a loan through a centralized online portal that will collect standard information about your business to determine eligibility.
- Applicants will be matched with a participating lender.
- One of the lenders will assist the small business with the application and provide hands-on support to ensure the small business is able to navigate the process or be redirected to a more appropriate product.
- To apply use the Connect2Capital platform to get started: connect2capital.com/partners/california-rebuilding-fund/
What You Should Know:
This is a state-wide program, funds are limited, however the Fund will prioritize equity in distribution and access of funds by setting program wide targets to ensure diversity. The loan applications will not be processed first come first serve. Applications will be prioritized to maximize support for businesses that traditionally lack access to credit.
The California Capital Access Program for Small Business (CalCAP SB or Program) encourages banks and other financial institutions to make loans to small businesses that have difficulty obtaining financing. If you own a small business and need a loan for start-up, expansion or working capital, you may receive more favorable loan terms from a lender if your loan is enrolled in the CalCAP Loan Loss Reserve Program. This program helps communities by providing financing to businesses that create jobs and improve the economy.
CalCAP is a loan loss reserve program which may provide up to 100% coverage to participating lenders on losses as a result of certain loan defaults. With CalCAP portfolio support, a lender may be more comfortable underwriting small business loans.
Check to see if your commercial lender or financial institution participates in CalCAP or find a participating lender. If your financial institution does not currently participate, it is easy for lenders to sign up. Please have your institution complete the Financial Institution Application and send it to CalCAP to get started.
For more information, please visit CalCAP website.
New Capital: Recognizing that businesses will need capital to make it through this emergency and get back on their feet, state and federal agencies are leveraging current programs and activating disaster loan programs. There are both state and federal direct loans, as well as state loan guarantees and other credit enhancements. The JEDE Committee is reviewing the programs to determine capacity and programmatic limitations to meeting the needs of small businesses in the COVID-19 emergency. Currently available programs include:
- State Programs: California’s Small Business Finance Center provides small businesses access to a range of financial products, including the Small Business Loan Guarantee (guarantee through private lenders) and the Jump Start Program (direct loans to businesses). More information is available at: https://www.ibank.ca.gov/small-business-finance-center/
- California also offers a loss reserve program to encourage private lenders to provide small business loans. More information about the California Capital Access Program is available at: https://www.treasurer.ca.gov/cpcfa/calcap/sb/institutions.pdf
The Governor’s Office of Business and Economic Development (GO-Biz) has compiled helpful information for employers, employees, and all Californians.
Visit the Employment Development Department website for employer assistance, such as tax assistance, protecting workers from Coronavirus, and information about work sharing programs.
Cameo is a statewide micro-business network dedicated to small and microbusiness financing such as loans and credit, technical assistance and business management training. A micro-business is a firm with five or fewer employees, started for $50,000 or less in initial capital and that may not have access to traditional commercial loans.
Labor and Workforce Development Agency Resources for Employees: There are several compensation options available to employees, such as Paid Family Leave, Unemployment Insurance, and Paid Sick Leave. View this comprehensive chart to see what your employees may qualify for.