Businesses and employers

A loan guarantee is a credit enhancement that helps mitigate the risk assumed by a lending institution when making a loan. With the Small Business Finance Center’s Disaster Relief Loan Guarantee Program, IBank agrees to guarantee up to 95% of the loan, removing the barriers to capital that often exist for small business borrowers that may not otherwise be eligible for traditional lending. This program also can assist those who may not be eligible for a U.S. Small Business Administration (SBA) loan.

Small business entities that have been affected by loss, damage or other economic injury due to the COVID-19 pandemic and meet the program’s eligibility requirements. 

The business must have between 1-750 employees and be established as an entity, including:

• Sole Proprietor – Individual using legal name as business name that files a Schedule C, Schedule F, or has a fictitious business name or doing business as (DBA) statement
  • If the loan appears to be in the name of an individual, evidence of Sole Proprietorship will be required and may include a Schedule C, Schedule F, Seller’s Permit, and/or fictitious business name or DBA statement
• Limited Liability Company 
• Cooperative
• Corporation
• Partnership
• S-Corporation
• Not-for-profit

The program will not accept an individual as the borrower. It is permissible for an individual to be a guarantor or co-borrower on the loan, but the primary borrower must be a small business. It does not consider citizenship or immigration status for eligibility requirements, as long as the entity/individual meets the above criteria. Trucking owners/operators are eligible as long as they are registered as a legal business entity.

AND

• The business activity must be eligible under the program and in one of the industries listed in the North American Industry Classification System (NAICS) codes list, and
• It must be located in a declared disaster area. A major disaster area declaration was made for the state of California on March 22, 2020 in regards to the COVID-19 pandemic.

Businesses that are not eligible include passive real estate businesses (rental income, etc.).

Yes, this program is designed for those who do not qualify for federal programs. 

The Small Business Finance Center’s Disaster Relief Loan Guarantee Program allows a maximum loan of $1.25 million and a maximum guarantee of $1 million. To serve as many California small businesses as possible, the COVID-19 disaster program is focused on serving small businesses, especially those in low-wealth and immigrant communities with needs from $500 to $50,000. 

The length of the loan can be negotiated with your lender, but the guarantee is good for up to seven years.

The Small Business Finance Center partners with Community Development Financial Institutions, Community Lending Institutions, and Financial Development Corporations (FDCs) to provide loan guarantees for small businesses.  To apply,

• View the list of participating lenders interested in this Small Business Disaster Relief Loan Guarantee Program. 
• Contact the lender on the list nearest to your business to apply.

The program is in place and businesses can apply immediately. Once you provide your lender with complete information, you could be funded in a matter of days.

By working with the Community Development Financial Institutions (CDFIs) throughout the state of California, this disaster relief program can play an important role in generating economic growth and opportunity in some of our most distressed communities. CDFIs and mission-based lenders play a vital role across the state and have experience steering lending and investment to where it is needed and will matter the most, in particular in low-wealth and immigrant communities. CDFIs and our partner Financial Development Corporations (FDCs) that process the loan guarantees are embedded in communities across the state, speak several languages, and are invested in the community successfully managing its way through this pandemic.

Faith-based businesses (non-profit or otherwise) that have business activity outside of worship are eligible as long as they are a legal business that has been affected by the COVID-19 pandemic.

Follow the industry-specific guidance for your industry or business. No matter what type of business you have:

• Tell employees to stay home if they are sick.
  • Implement sick leave policies to support that.
  • There are government programs supporting COVID-19 sick leave and workers’ compensation.
• Routinely clean the workplace.
• Reduce travel. Encourage video conferencing and limit large gatherings.
• Follow Cal/OSHA interim general guidelines on protecting workers from COVID-19.
• Follow CDC guidance on keeping the workplace safe (PDF).

If an employer discovers 3 or more workers have tested positive for COVID-19 or has symptoms within a 14-day period, they are required to:

• Report the following information to their local health department within 48 hours:
  • Name and address of the worksite
  • Number of cases
  • Names and occupations of workers with COVID-19
  • North American Industry Classification System code of worksite. This is a 6-digit numeric code that classifies businesses by industry.
• Notify the local health department if additional cases are identified at the worksite

For more information about employer requirements, including record keeping and reporting, see COVID-19 Temporary Standards – What Employers Need to Know (PDF).

Cal/OSHA has issued statewide industry guidance on how to protect workers from coronavirus.

The federal Paycheck Protection Program (PPP) offers forgivable loans to small businesses and nonprofits. PPP funds can be used to pay employee wages. Learn more about the PPP at the U.S. Small Business Administration website.

Additionally, the Employment Development Department offers the Unemployment Insurance (UI) Work Sharing Program as a temporary alternative to layoffs.

Provided through the U.S. SBA, the Paycheck Protection Program (PPP) offers forgivable loans for up to $2 million to small businesses and nonprofits. PPP loans can be used to pay qualifying expenses like employee wages, covered property damage, supplier costs, worker protection expenditures, or operating expenses (like rent and utilities). When used for qualifying expenses, PPP loans are forgivable up to $150,000.  

Businesses who received PPP funds can apply for loan forgiveness. Loan forgiveness application instructions are available at the SBA website. You can also contact your PPP lender.

Learn more about the PPP at the U.S. Small Business Administration website.

The SBA also offers the Economic Injury Disaster Loan (EIDL). The SBA is accepting new applications from all eligible businesses, and will continue to process EIDL Loan applications already submitted on a first come, first-served basis.

Check the U.S. SBA’s Disaster Loan Applications website for more information.

The EIDL is a direct loan for up to $2 million at a rate of 3.75% for small businesses and 2.75% for nonprofits. Apply directly with the SBA. For questions, you can contact SBA’s Customer Service Line at 1-800-659-2955 / 1-800-877-8339 (TTY), or send an email to disastercustomerservice@sba.gov.

The EIDL Advance, which provided grants of up to $10,000, has been discontinued. EIDL loan applications will still be processed even though the Advance is no longer available.

Small businesses with 500 or fewer employees are eligible to apply for the Small Business Debt Relief Program. Review the SBA’s loan details and forgiveness information.

Small businesses can apply for the Paycheck Protection Program if they have:

• 300 or fewer employees AND
• At least a 25% drop in gross receipts in a 2020 quarter compared to the same quarter in 2019

Learn more about the PPP at the U.S. Small Business Administration website.

SBA has district offices in California that are open to answer questions. You can use the SBA’s Local Assistance Directory to locate the office nearest you. You can also contact the SBA by phone at 1-800-659-2955 / 1-800-877-8339 (TTY), or by email at disastercustomerservice@sba.gov.  

Call or email the SBA to find out which program is right for you. While businesses can apply for and receive more than one form of capital assistance through the SBA, they cannot be used for the same purpose. The SBA can advise you on your options. Call 1-800-659-2955 / 1-800-877-8339 (TTY), or email disastercustomerservice@sba.gov.

SBA has a Debt Relief program and will pay the principal and interest of existing SBA loans. Please contact your lender for information.

California’s network of small business support centers can help you figure out which loans and programs are best for your business, develop resiliency strategies, and find other resources. Go to California’s small business centers to find the closest center.