Roundup: California rushes to rescue small businesses feeling COVID-19 impact

0 Comment(s)Print E-mail Xinhua, April 17, 2020
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By Julia Pierrepont III

LOS ANGELES, April 16 (Xinhua) -- Small businesses are struggling hard as the fatal COVID-19 pandemic continues to spread, Californian Assemblyman Kansen Chu told Xinhua on Wednesday.

"Small businesses are the backbone of California's economy and are in urgent need of assistance," he asserted.

California's over 4 million small businesses represent over 99 percent of all businesses in the Golden State, boasting the highest number of small businesses of any state in the country. That's nearly twice the number that Texas, Florida, and New York each have.

According to the U.S. Small Business Administration, California small businesses employ 7.1 million people, about half of the state's entire workforce.

Los Angeles County said on its official website that the economy would be the 19th largest in the world if the county were a nation and that it is America's top international trade and manufacturing center, with more minority and women-owned businesses than other states.

Public officials and private business owners are becoming increasingly alarmed as more of greater Los Angeles' over 244,000 small businesses being shuttered due to the state's shelter-at-home orders, with many teetering on the edge of insolvency.

"Experience shows that the small business owner will likely sustain the highest level of economic injury during this health crisis and will be the least likely to recover from sustained economic loss," said LA County Supervisor Mark Ridley-Thomas. "This represents a significant threat to the county's economic well-being."

On the federal level, 2 trillion U.S. dollars in bipartisan funding was passed in March for the Coronavirus Aid, Relief and Economic Security (CARES) Act. The 349 billion U.S. dollars in non-repayable loans to keep small businesses afloat has been gobbled up already, and unlucky latecomers must wait for more to be granted by Congress -- perhaps next week.

The SBA's 10-billion-dollar Economic Injury Disaster Loan program has also been providing lifesaving financial support to small businesses. But with the whole country in chaos, the fund has run dry as well.

With many California small businesses relying on local resources for immediate financial relief, Ridley-Thomas isn't counting on federal aid.

"The county must come to the aid of these businesses and entrepreneurs, or risk economic collapse in the communities they live in and serve," he said in a motion to create a 28-million-dollar public-private relief fund for LA County to assist local small businesses devastated by the novel coronavirus.

Some 12 million dollars of the initial outlay will come from LA County, with additional private sector commitments for up to 15 million dollars via Paycheck Protection Program loans that target micro-enterprises and nonprofits accessed through the Community Reinvestment Fund, Goldman Sachs' national community development partner.

This funding is slated for grants to micro-entrepreneurs with fewer than nine employees, working capital loans to companies unlikely to qualify for federal dollars and other vulnerable businesses, as well as dying enterprises which won't receive federal assistance in time.

A host of other public and private relief funds are cropping up in California which come in many forms, functions and sizes. Struggling entrepreneurs can combine county dollars with other loans and grants from other organizations to garner more assistance.

For instance, the Los Angeles County Development Authority is also offering low-interest loans of up to 20,000 dollars to small businesses that have up to 25 staff.

Chu has recently proposed a bill in the California Assembly to set a moratorium on business evictions so lockdown-striken small businesses won't be evicted for at least 90 days.

Meanwhile, non-corona small business loans are still available, such as the County Float Loan Program for loans of 1 to 3 million dollars for land acquisition, construction, equipment, and working capital.

The County Economic Development Loan Program for loans of 50,000 to 1.5 million dollars for small and medium-sized businesses for property acquisition, equipment or machinery purchases, working capital, and job creation and retention is another option. Enditem

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