Small Business Loans: 8 Programs for LA Businesses
LA restaurants were allowed alfresco dining.
Photo by Thomas Wasper
Finally, there are reasons to be optimistic after 12 dark and murderous months. However, the economy has not yet recovered and many business owners still need help.
Those who managed to weather the dire conditions of the past year and overcome the whiplash of stay-at-home orders over and over again are “drained financially and mentally,” said Tunua Thrash-Ntuk, executive director of Los Angeles Local Initiatives Support Corp., which administers a Covid-19 grant program for the city and county of Los Angeles.
Everett Sands, Managing Director of BSD Capital Inc., which operates as Lendistry, a downtown-based community development finance institution, agreed.
“There is still a long time to go before we hit full speed or return to a full economy, and every day as we continue the pandemic the need is still there and probably growing,” he said.
For these companies, there are already many pandemic loans and grants, and more are on the way.
On February 24, Governor Gavin Newsom signed a stimulus package that includes $ 2 billion to replenish the Covid-19 small business relief grant program, which Lendistry administers.
“It’s pretty exciting,” Sands said. “We are in a recession, but by far there is also more money available – no comparison.”
With help from Thrash-Ntuk, Sands, and the Bet Tzedek nonprofit, the Business Journal has compiled a list of local, state, and federal loan and grant programs that are open now or are expected to open soon. .
Paycheque Protection Program
Paycheque Protection Program
Status: Open
Deadline: March, 31st
Administered by: Approved lenders
About the program: The grandfather of Covid-19 relief funding programs, this Small Business Administration program was renewed in the December federal stimulus bill.
The latest cycle prioritizes small and underrepresented business owners and includes changes to help sole proprietors and independent contractors.
Typically, for new applicants with employees, the maximum loan amount is 2.5 times an organization’s monthly salary costs, up to $ 10 million, and can be used for payroll, rent, mortgage interest and utilities.
This round also includes up to $ 2 million in second-draw loans for businesses that used their first P3 loan, have 300 or fewer employees, and experienced a 25% drop in revenue in 2020.
Businesses must apply through an SBA approved lender, and an interactive map of all approved lenders is available on the SBA website. PPP loans have an interest rate of 1% and a term of two years.
Loans do not need to be repaid if recipients submit records to show that they have maintained their salary expenses and staffing levels within 24 weeks of receiving the loan.
Emergency loan for economic disasters
Emergency loan for economic disasters
Status: Open
Deadline: Nothing
Administered by: Small business management
About the program: For this loan program, companies apply directly through the SBA website. The EIDL proceeds can be used for a range of expenses, from health care benefits and rent payments to debts and increased production costs.
Companies are not allowed to use the proceeds of the PPP loan and an EIDL for the same purposes.
The loans have a fixed interest rate of 3.75% and have a term of 30 years. Security is required for loans over $ 25,000. Unlike PPP, these loans are non-repayable.
To be eligible, businesses must have 500 or fewer employees. Sole proprietorships, independent contractors and many self-employed workers are generally eligible.
Covid-19 Small Business Relief Grant Program
Covid-19 Small Business Relief Grant Program
Status: Reopening on March 25
Deadline: March, 31st
Administered by: Lendistry
About the program: California’s New Stimulus Package injected $ 2 billion into this grant program, a four-fold increase from the previous allocation of $ 475 million. The next round of applications will open on March 16 and end on March 23 for nonprofit arts and culture institutions, and March 25 for small businesses and nonprofits.
Recipients will receive grants of $ 5,000 to $ 25,000 with amounts tied to annual income. The funds can be used for employee expenses, including salary costs, rent and mortgage payments, costs associated with Covid-19 security protocols, and debts incurred before March 1, 2020.
Eligible organizations include sole proprietors, independent contractors, and businesses with an annual gross income of less than $ 2.5 million. Organizations must have a physical address in California and have been in operation as of at least June 1, 2019. Nominations must be submitted through state-approved partners; a list is available on careliefgrant.com.
Small Business Stabilization Loan Program
Small Business Stabilization Loan Program
Status: Open
Deadline: Nothing
Administered by: Los Angeles County Development Authority
About the program: These loans range from $ 50,000 to $ 3 million and have a fixed Wall Street Journal prime rate of 3.25%. Most businesses are eligible as long as they have a physical location in LA County and have been in business for at least two years at the time of application.
The funds can be used for working capital, equipment, inventory, the acquisition of real estate and the refinancing of existing loans. The program is funded by $ 10 million from the US Economic Development Administration.
FOUND / LA Small Business Recovery Fund
FOUND / LA Small Business Recovery Fund
Status: Opening March 15
Deadline: March 21st
Administered by: Pacific Community Ventures and TMC Community Capital
About the program: This fund was started by Jane and Raymond Wurwand, owners of Carson-based skin care company Dermalogica. He is about to open his fourth round of candidacy.
To be eligible, businesses must be located in LA County and have a physical location, fewer than 20 employees, sales between $ 30,000 and $ 3 million, and a founding date prior to February 2019. Workers economy, independent entrepreneurs and home based businesses are not eligible.
The amount of the subsidy ranges from $ 5,000 to $ 25,000 and is equivalent to the cost of one month’s rent plus $ 2,000 per employee. The winners will be picked at random.
California Reconstruction Fund
California Reconstruction Fund
Status: Open
Deadline: Nothing
Administered by: Approved lenders
About the program: This program was set up by the State at the end of 2020 in partnership with private lenders, including IBank, which has made a base commitment of $ 25 million.
Through the program, two types of standardized loans of up to $ 100,000 are available from several lenders. The terms include a fixed annual interest rate of 4.25% and a 3-year or 5-year repayment schedule.
To be eligible, businesses must have employed 50 full-time equivalent employees or less by March 2020 and have gross revenue of less than $ 2.5 million in 2019. After completing an online pre-application, businesses are matched with a participating community lender.
LA Covid-19 Regional Stimulus Fund
LA Covid-19 Regional Stimulus Fund
Status: Soon the reopening
Deadline: N / A
Administered by: Los Angeles Local Initiatives Support Corp.
About the program: The LA Regional Covid-19 Recovery Fund is a City-County of Los Angeles partnership to help small businesses, nonprofits, and workers in the odd-job economy with an annual income of less than $ 100 $ 000.
Last year, in multiple rounds of funding, a total of $ 99.6 million was distributed to 7,322 organizations, of which 80% of grantees identified themselves as minority-owned or led. A new round of grants is expected later this month. Sign up to be notified on the program’s website.
Subsidy for shutter room operators
Subsidy for shutter room operators
Status: Opening soon
Deadline: N / A
Administered by: Small business management
About the program: This targeted subsidy program is aimed at operators or promoters of performance venues, cinemas, talent representatives and certain museums. To be eligible, businesses must have been in business by February 29, 2020 and will be excluded if they received a PPP loan on or after December 27, 2020.
The amount of funding will vary, but for those who were in business before January 1, 2019, the grants will be equal to 45% of 2019 gross income or $ 10 million, whichever is less.
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