Owners of struggling small businesses in Southern California applaud the Newsom government’s plan to expand a subsidy program to keep them afloat amid the COVID-19 pandemic.
Many mom-and-pop businesses have been hammered by the costs associated with repetitive, repeated shutdowns and ever-changing security guidelines to protect employees and customers.
On Thursday, Newsom said it would ask state lawmakers to add $ 1.5 billion to a program that provides free grants of up to $ 25,000 to small businesses. It would complement the program’s current funding of $ 2.5 billion, bringing the total to $ 4 billion.
Jeanie Viveros, co-owner Tiddlywinks games and toys in Orange with her husband Gilbert, called Newsom’s plan “good news.”
âWe are still not operating where we were in 2019, so we could use all the money available to help us with marketing and promotions,â she said.
Eight years old in Old Towne, Tiddlywinks sells classic style toys, games and puzzles. The 2,300-square-foot store was building its online presence when COVID-19 hit.
âWe started this literally weeks before, and when the pandemic hit it pushed us to move forward,â she said. âWe continue to rebuild our business.â
To be eligible for grants, businesses must have between $ 1,000 and $ 2.5 million in annual revenues. They must have been active before June 1, 2019 and be physically present in California.
Newsom also announced $ 147 million to give qualifying businesses a tax credit of up to $ 1,000 for every employee they hire. Additional funding would include $ 95 million for Visit California, a nonprofit that promotes tourism; $ 250 million to help offset losses at state ports; and increasing the “CalCompetes” tax credit to $ 360 million, which encourages businesses to locate in California.
Viveros says she could take advantage of the hiring business tax credit. Two students who worked there recently left after graduating to take on other jobs.
No help from owner
Times have also been tough for lounge K at Stevenson Ranch. Owner Kim Heinrich said she has had to repeatedly shut down her business and her employees on leave, only to reopen and rehire them again as COVID-19 mandates change.
âWe were closed for six months last year,â she said. âWhen we reopened we were at 20% to 50% capacity, and now we’re at 75%. It was horrible because my landlord was not working with me at all. There was no rent reduction and threatening emails, even with the rent moratorium in effect.
Heinrich said she would likely seek a grant under the expanded state program.
âI have already applied for a grant,â she said.
Turnover divided by two
Sinfully Sweet Apple Company in downtown Upland did not close its doors during the pandemic, but it was hit hard.
The store lost 50% of its revenue in 2020, according to owner Martha Henderson. Contracts for caramel apples used as prizes or gifts in fundraisers ended up not being fulfilled.
âAt the end of March, I got email after email – everyone was canceling their fundraisers because schools were closed,â Henderson said Thursday. âInstead of producing 50,000 apples last year, we made 18,000.â
She received a $ 10,000 bridging loan that she now has to repay, so she welcomes Newsom’s idea of ââa $ 25,000 grant that does not have to be repaid.
âI think it’s absolutely wonderful,â said Henderson. “I like this idea.”
Learn to pivot
Shelly Holman, owner of Collar and Leash Pet Shop in Garden Grove, said the new grant would help him immensely.
Holman, whose family has owned the store since 1972, said sales had fallen along with grooming services. she said. “Customers have gone online to buy things like dog toys, and many have avoided bringing their pets for services, especially at the start of the pandemic.”
She said it was difficult to figure out how to make all of her payments each week.
âWe’re not like big companies that can put everything on credit or negotiate prices down,â she said.
In the midst of the chaos, she learned to pivot.
After losing a tenant in an adjacent location – âand with the pandemic, no one wanted to rent itâ – she expanded a relatively new animal welfare center next door.
âYou have to be flexible,â she says.
Anja Walker, who closed her Riverside restaurant on Soup Shoppe at the start of the pandemic, had not yet heard of Newsom’s proposal, but said state and local grants helped his business stay in business after it reopened.
Business has improved, she said, since Riverside moved into the Orange Tier, which made it possible to eat indoors at reduced capacity.
âWe were doing a lot of take out, and it gradually moved on to more indoor,â Walker said.
The grant money will likely disappear quickly.
Newsom implemented a small business grant program in December. About 334,000 companies applied in the first round of funding, requesting $ 4.4 billion in grants. But the program only had $ 500 million to spend. In February, Newsom and lawmakers added $ 2 billion to the program. Now he wants to include the additional $ 1.5 billion from federal relief funds.
The Associated Press contributed to this report.