Guarantee of the Aid Loan in Case of an Emergency Call

If your business suffered losses due to the COVID-19 pandemic or another type of emergency, Disaster Relief Loan Guarantees can be of great use to you. Designed to facilitate access to bank loans, they are a viable financing option for small businesses.

What does it consist of?

The Disaster Relief Loan Guarantee program is a way for the state government to act as a guarantor to financial institutions. When a bank lends money to a small business due to losses sustained by COVID-19, the state government guarantees 95% of loans up to $1 million. In this way, the state of California minimizes the risk of loans and promotes access to capital for small businesses.

If you receive one of these secured loans, you can use the funds to continue your business or repair damage caused by the pandemic.

Who is eligible?

If you own a business with fewer than 750 employees in the state of California, this program can help you recover from emergency situations.

According to the Comptroller’s Office website , the Emergency Call Assistance Loan Guarantee is available to businesses located in low-income communities, eligible non-profit organizations, and immigrants.

How is it requested?

The first step to receive this benefit is to apply for a loan with one of the participating organizations (site only available in English). These are the certified lenders to date. If your lender is not on the list of participants, you can sign up to be part of the program.

It is important to note that the state of California does not determine the terms of the loan. The requirements to apply, the interest rate and other details of the loan are at the discretion of the lender.

If you need help with your application, you can go to the nearest Small Business Development Center .

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California Economic Recovery Program

Funded by nonprofits, community leaders, and state government, the California Economic Recovery Program provides support to small businesses impacted by COVID-19. This program focuses primarily on low-income areas and businesses with little access to capital.

What does it consist of?

The California Economic Recovery Program consists of flexible loans of up to $100,000 or 100% of your average monthly income before the COVID-19 pandemic. They also offer advisory services to help entrepreneurs get ahead after the pandemic.

Unlike other small business aid, this program does not offer any type of debt forgiveness. The loans provided under this program must be paid in a maximum of 5 years, with a fixed interest rate of 4.25%.

Who is eligible?

To be eligible for this program, your business must have fewer than 50 employees and gross revenue of less than $5 million in 2019. You must also prove that your business suffered financial and operational problems due to the pandemic.

How is it requested?

Based on your business profile, this program connects you with a Community Development Financial Institution . They will help you complete your application and will evaluate your application. If your loan is approved, you will need to make payments directly to the financial institution that lent you the funds.

Business license fee relief for small businesses

If your business requires a license to operate in the state of California, this help may allow you to keep your state permit even if you have trouble paying the annual fee.

What does it consist of?

Due to the COVID-19 pandemic, California is exempting certain businesses from paying up to two years of state license between March 1, 2021 and February 28, 2028.

Who is eligible?

To qualify for this program, you must have maintained your license active until December 31, 2020. In addition, your location must have interrupted operations due to the health measures imposed to contain the pandemic.

Some of the eligible businesses include restaurants and businesses that serve alcoholic beverages, hair salons, and cosmetologies. You can find a complete list of the types of business licenses that qualify for this federal relief on the state website California.gov .

If you need specific information about barber and cosmetology businesses, the Fee Relief Information page provides answers to some of the most frequently asked questions .

How is it requested?

To find out if you qualify, use the official search engine to find out if your license number is exempt from payments. If your business has a balance due, you can submit the fee waiver on this same website.

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Economic Injury Disaster Loan (EIDL)

The COVID-19 Economic Injury Disaster Loan (EIDL) stopped accepting new applications on December 31, 2021. However, these funds can still help people who applied before the deadline. . Business owners who only used a portion of the approved loan may also apply for additional funds.

What does it consist of?

EIDL loans use federal funds to provide financial assistance to small businesses and nonprofit organizations. The main purpose of this money is to cover expenses that they were unable to pay due to the pandemic. The maximum amount of these loans is $500,000.

Who is eligible?

As we mentioned earlier, the EIDL program closed in 2021. To qualify, applicants had to be businesses with fewer than 500 employees, non-profit organizations, religious organizations, sole proprietorships, or independent contractors. Another requirement for this loan was to have a location in the United States and to have suffered losses due to the pandemic.

How to request more funds?

Despite having been closed, the US Small Business Administration (SBA) website indicates that they continue to process applications received before the deadline.

Applicants who only accepted a portion of the loan that was offered to them have up to two years to request the rest of the money, even after December 31, 2021.

SBA debt relief

To avoid unemployment and help small businesses retain their employees during COVID-19, the SBA offered two rounds of loans through the Paycheck Protection Program (PPP). Now that this aid has been closed, the entrepreneurs who benefited from these loans could be eligible for forgiveness.

What does it consist of?

SBA debt relief consists of full forgiveness of money as a PPP loan . Under AB80 , forgiven loans are not taxable and expenses made with these funds may be tax deductible.

Who is eligible?

To qualify for the PPP, business owners had to demonstrate losses of more than 25% during at least one quarter of the pandemic.

To be eligible for debt forgiveness , the SBA indicates that these companies must have maintained their employment levels for a period of 8 to 24 weeks after receiving the loan. In addition, they need to have spent the loan on eligible wages and expenses. Also, they must have used at least 60% of their earnings to cover payroll costs.

How is it requested?

To request forgiveness of your loan, you must start the process within 10 months of completing the period of your loan. If you are in this window, request a debt forgiveness form from your lender. Include the required payroll documentation and submit the completed form to your lender. They will tell you if the SBA accepted your application and how much of the debt was forgiven.

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fourth stimulus check

Despite the fact that many people continue to suffer the economic consequences of the pandemic, everything seems to indicate that the United States government is not going to approve a fourth stimulus check for the population. To counteract the effects of inflation and unemployment, some states have offered additional aid to their residents.

The state of California awarded two rounds of the Golden Gate Stimulus to help individuals and families. To help small businesses, California also has its own resources in the form of loans, grants, and tax credits .

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