During the past two weeks, several Greater Palm Springs cities have initiated new grant and loan programs to assist local businesses as we all nervously wait for the vaccines to help turn the corner to a more normal life and economy.
The Big Picture
The second round of PPP lending, part of an overall COVID economic stimulus package, The Economic Aid Act, passed at the end of December, provides for a $284 billion pool of money to help struggling businesses survive during the pandemic. Eligible companies include those that previously received a PPP loan during the first round of lending, as well as those applying for the first time.
PPP2 includes changes to bolster truly small businesses, rather than larger ones, including corporations that have access to capital markets. For example, in Round One of PPP, Shake Shack was among the corporations that applied for and were granted a $10,000,000 PPP loan that the burger chain later returned.
There are new provisions in the PPP2 legislation to provide aid specifically to hard-hit restaurants and hotels which are the backbone of our local hospitality and tourism economy – our number one economy driver. An informal phone survey of local bankers reveals very brisk application activity but it’s not as robust as the original PPP. According to Nicholas Thompson, VP, Desert Area Manager for California Bank & Trust, the current volume of applications is running at about two-thirds of that of the original program in 2020. “There are a couple factors that stand out in this second version of the PPP worth noting,” says Thompson. “In the first PPP, the borrowers were much more stressed and the documentation requirements were not as stringent. We were able to get applications in and thus see the funding moving faster. Now there are some bottlenecks based on documentation issues and the focus has been on smaller companies and more limited funding amounts this time.”
State of California Announces Second Round of Small Business Relief
The California Office of the Small Business Advocate, part of the Governor’s Office of Business and Economic Development, has announced that Round 1 for the Small Business COVID-19 Relief Grant Program has closed.
With more than 300,000 applications completed, the agency began disbursing funds across a 45-day verification period that began on January 22.
The second round of applications will open at 8:00 a.m. on February 2 and run through 6:00 p.m. February 8. Applicants who submitted all necessary documents in the first round and met eligibility requirements, but did not receive a grant, do not need to reapply as their applications will be rolled over for consideration in the second round.
The grant program is not a first-come, first-served program, nor a rolling approval process. Grants will be distributed across the state, with priority given to regions and industries impacted by the COVID-19 pandemic, disadvantaged communities, and underserved small business groups.
Below is an overview of the most recent local opportunities for pandemic assistance.
Palm Desert Providing $800K To Restaurants Needing Aid
The City of Palm Desert is seeking applicants for its Unite Palm Desert Restaurant Recovery loan program. The City has earmarked $800,000 for the program, which is designed to aid restaurants facing shut down as a result of the COVID-19 pandemic and related State of California public health orders.
Loans will be made in $5,000 increments plus $1,000 per full time equivalent employee up to a total of $10,000 per establishment. Loans will not require repayment if participating restaurants comply with State public health orders. Participating restaurants must offer take-out and, if available, delivery services while retaining the number of employees listed in the application through May 31, 2021 in order for loans to be considered for forgiveness.
Applications and guidelines can be found at PDbizsupport.com. Applications will be accepted on a first-come, first-served basis beginning at 8 a.m. on Wednesday, January 20, until 11:59 p.m. on Sunday, January 31. A current City of Palm Desert business license is required to qualify. Recipients can expect funds in about 30 days following an executed loan agreement.
Palm Desert Mayor Kathleen Kelly said the new program will support one of the community’s vital business sectors. “We are extremely grateful to all of our businesses who are supporting current health orders for the sake of the common good despite the hardship on them,” Kelly said. “This bold addition to the other support available is designed to particularly sustain our hard-hit restaurants, such a key part of our community and economy.”
Rancho Mirage Small Business Relief Program is Open
Applications and program materials are now available for the City of Rancho Mirage’s Small Business Grants Program. The program was established specifically to provide financial relief to Rancho Mirage businesses impacted by the COVID-19 pandemic with priority being given to those in the retail, restaurant and personal services sectors.
The Rancho Mirage City Council approved allocating funds for business recovery and resiliency efforts, including small business grants. Approximately $500,000 is available for the Rancho Mirage Small Business grants, which will provide working capital of up to $10,000 per business on a first come, first serve basis.
To be eligible to apply for the Grant Program, a business must demonstrate the need for financial support due to the temporary loss of revenue resulting from the impact of the COVID-19 pandemic and the Stay-at-Home order.
The application period opened on January 15 and closes on Sunday, January 31.
Eligible applicants must have:
- A physical location and be operating in Rancho Mirage for at least one year;
- A valid city business license;
- A valid certificate of occupancy;
- No active code violations;
- Been adhering to state and regional orders;
- Provide proof of valid identification, and
- Proof of ownership, a Form W-9 and other required supporting documentation of the business entity, including a DBA or articles of incorporation.
Applicants must prove that their business has been affected by COVID-19 because the business was deemed non-essential and was forced to shut down by the state or local government or sales are down by 25 percent or more in the last quarter (October, November, December 2020) compared to the previous year during the same three months or a comparable 3-month period in 2019.
Cathedral City Creates Economic Assistance Program
In late 2020, the Federal Housing and Urban Development agency awarded Cathedral City an additional allocation of Community Development Block Grant funds through the CARES Act. Recognizing the difficult situation Cathedral City businesses are facing due to COVID-19, the City Council voted to create an economic assistance program for Cathedral City businesses with approximately $450,000 available.
Cathedral City businesses may qualify for financial assistance if they have been impacted by COVID-19, maintain a physical presence within Cathedral City, and have less than 25 full-time equivalent employees.
Priority will be given to restaurants, retail store and personal care businesses. Personal care businesses include hair salons, barber salons, fitness-related businesses, nail salons and other eligible businesses which have been inequitably impacted by COVID-19.
Cathedral City businesses may apply for only one of two programs. The programs are:
- A micro-enterprise grant. A micro-enterprise is a business with five or fewer employees, including the owner. If selected, a micro-enterprise may be reimbursed up to $7,500 for eligible expenses.
- A physical improvement focused forgivable loan. Forgivable loans are for businesses with less than 25 or fewer full-time equivalent employees that may apply for up to $20,000.00. To be eligible for forgiveness, the business must propose allowable expenses, comply with city quarterly reporting requirements, and meet all HUD requirements.
More information is available on the application portal at www.ccedd.org/economic-relief.
Indio is Developing a New Business Grant Program
At its most recent meeting on January 20, the Indio city council discussed a new business grant program it plans to roll out soon.
The emphasis will be, like the other city programs, to support personal services companies, restaurants and retailers. These companies will be able to apply for $10,000 grants. The city is looking to help those in the daycare sector, a critical component of keeping the labor force ready and available, at the level of $5,000.
The total amount targeted for Indio’s new business assistance program is roughly $650,000.
Details of this program will be released by the city in the near future. Keep an eye out by visiting the city’s website at www.indio.org and searching under “COVID-19 Business & Financial Support.”
Summary
The scope of this article is to help those currently in need understand what is available for them now. Virtually every other Greater Palm Springs city not noted here, along with the County of Riverside, has created critical and extensive financial support and assistance programs for businesses with both funding and technical expertise provided along the way since last summer.
The regional business community should be proud of, and give a tip of the cap to, our local leaders who knew the needs were extraordinary and jumped in and took action.
