For City of Sacramento Businesses Impacted by COVID-19
To mitigate the impact of COVID-19 on Sacramento businesses and their employees, the City of Sacramento (City) committed $15 million in federal Coronavirus Aid, Relief and Economic Security (CARES) Act funding to create a Small Business Recovery Program.
The Small Business Recovery Program will provide up to $25,000 in forgivable loans and technical assistance to businesses and nonprofits located in the City of Sacramento to provide economic support in connection with the COVID-19 public health emergency.
The forgivable loan program aims to ensure an equitable distribution throughout the City of Sacramento to assist local businesses and nonprofits that have been affected by the COVID-19 pandemic. To ensure this happens, the City has set a goal to have at least:
25% of the funds go to micro-enterprises, defined as those with fewer than five employees.
The application period will open on Monday, June 29, 2020, at 9 AM and close Monday, July 13, 2020, at 5 PM. The City will not accept applications after the application window closes.
The City will screen applications using the eligibility criteria below. After the initial screening process, and a review and scoring process, the City will use a lottery or random draw to make the final selection of the businesses and nonprofits that will receive loans.
A business or nonprofit must meet the following criteria to be eligible to receive a loan:
For-profit or non-profit organization that had up to 25 full-time equivalent employees (“FTE”) during an average week in 2019;
Franchise business as long as the franchisee does not own more than 2 franchise businesses;
Physical establishment within the City of Sacramento (includes home-based businesses);
Business or nonprofit must have been in business 12 months as of March 1, 2020;
Projected annual revenues of less than $3 million in gross revenue for 2020;
Demonstrated financial hardship due to COVID-19 health restrictions, such as a loss in revenue;
Cannot be a business owner that has previously been awarded funding for the same business in the City’s original Small Business Economic Relief Fund COVID-19 relief loan program;
Be in good standing with the City of Sacramento (e.g., current on bills, no liens or judgments, etc.);
Be in compliance with all City and State employment requirements.
After the City makes the initial eligibility determinations, the loan applications for eligible businesses and nonprofits will be scored and reviewed by a loan committee consisting of City staff and qualified external partners after the application deadline ends. Loan applications that meet the minimum scoring threshold will be included in the lottery/random drawing. Funding decisions will be made within 30 days of the application period closing. If the City determines that additional information or supporting documents are needed to review an application, then the application is not considered complete. Funding may be released within two weeks of approval.
Upon approval of loan award, funding will be allocated as follows:
Home-based businesses with 1-2 FTE will receive a flat rate of $2,500;
Micro businesses of 5 or fewer FTE will receive a flat rate of $5,000; and,
Businesses with 6 to 25 FTE will receive $1,280 per FTE up to $25,000.
Meaning of Full-time Equivalent
The City of Sacramento determines the total number of employees of a business on a full-time equivalent or FTE basis. A full-time employee is one who works at least 40 hours per week. To determine the number of FTE for this loan program, add the total number of hours worked by all employees (full-time and part-time), not to exceed 40 hours for any employee, and divide the sum by 40. The result is the number of FTE. If the result is not a whole number, round up to the next whole number. Example: A business has one full-time employee who worked an average of 40 hours per week in 2019 and three part-time employees who each worked an average of 15 hours per week in 2019. To determine the business’s FTE number, add the average hours worked (again, not to exceed 40 hours per employee) and divide 40. In this case, (40 + 15 + 15+ 15)/40 = 2.1. This would be rounded up to 3.
The application period will open on Monday, June 29, 2020, at 9 AM and close Monday, July 13, 2020, at 5 PM. The City will not accept applications after the application window closes. All applications will be screened using specific criteria followed by a lottery/random draw for applications meeting the minimum scoring threshold.