COVID-19 was a detrimental blow to small businesses across the country. As the pandemic quickly nears its second anniversary, countless businesses struggle to recover. Certain small businesses sectors such as educational services, accommodations, food services, arts, and entertainment bore the worst of it, with limited financial backing. For those who managed to make it through the worst of these past two years, there is still a long road ahead.
Studies following the 2008 recession reported that the average small business took five to six years to completely recover. Smaller-scale operations require additional funding and support in light of the global pandemic. It is significantly more difficult for small businesses to adjust to lower demand while also funding new business models in response to a recession. The obvious need here is money. Fortunately, the U.S. Small Business Administration (SBA) is implementing California small business relief initiatives for small businesses impacted by COVID-19.
Small Business License Fee Exemptions
California businesses registered through the Department of Alcoholic Beverage Control (ABC) and the Department of Consumer Affairs are currently enjoying two years of fee relief. This applies to both restaurants and bars, as well as barbering and cosmetology businesses, licensed within the state of California.
Restaurant Revitilzation Fund
The Restaurant Revitalization Fund (RRF) is a pivotal form of California small business relief. Established through the American Rescue Plan Act, the RRF works to help keep restaurants open throughout the pandemic. This program offers funding up to $10 million, in an amount equal to the specific business’ pandemic-related revenue loss. Qualifying recipients are not required to pay back these funds provided they are used for restaurant aid no later than March 11, 2023.
California Rebuilding Fund
The California Rebuilding Fund offers loans equivalent to a business’ average monthly revenue for companies directly affected by COVID-19. If your business employs 50 or fewer full-time or full-time equivalent employees and generated gross revenue of less than $2.5 million in 2019, then you are eligible to receive this state-specific aid. These particular loans are not affiliated with Paycheck Protection Program (PPP) or any other SBA program. In this case, the business receiving financial assistance will be required to pay back the amount over a three to five-year period with a fixed annual interest rate of 4.25%.
Disaster Relief Loan Guarantee
The pre-established Disaster Relief Loan is purposed to fiscally aid small businesses and eligible nonprofits that have declared disaster. This financial relief system works to remove barriers to capital that small businesses often face. California-based businesses with 1-750 employees are eligible for a loan of up to $1 million. If your business or nonprofit has been negatively impacted as a direct result of COVID-19, then you likely qualify for this program. The Disaster Relief Loan is guaranteed for up to seven years in an amount of up to 95% of the loan. The current payback period and interest rates are negotiable between the lender and the borrower.