L.A. offers $5,000 grants to small businesses hit by pandemic

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By Alfredo Santana

Contributing Writer

HIGHLAND PARK — For 20 years, Maria Pineda operated Lupita’s 98 Party Store, renting out tables and chairs, and providing floral designs and balloon arrangements for weddings, baptisms, birthdays and other occasions.

Business was good until March 16, 2020, when Pineda had to close her doors for three months at the start of the coronavirus pandemic that brought shelter in place orders from health officials and a ban on gatherings of 10 or more people.

Orders for party rentals and decoration packages evaporated overnight. 

“Like almost everyone else, the pandemic forced us to quarantine,” Pineda said. “It affected us immediately. Everything was so fast.”

Twenty months later, Pineda’s business is back on its feet: almost. Sales have not yet reached pre-pandemic levels, but they have improved.

A program being offered by the city’s Economic Workforce Development Department is helping small business owners like Pineda regain their economic footing by providing $5,000 to micro, small and medium-sized local businesses if they can document losses caused by the pandemic.

Through the Comeback Checks Program, the city will provide 5,000 businesses with a grant using some of the funds the city is receiving from the American Rescue Plan approved earlier this year by Congress. 

The first distribution of funds took place from Oct. 26 to Nov. 2. The city is getting ready to open round two.

Pineda said she would assign her daughter, who serves as her business manager, to fill an online application.

Los Angeles Mayor Eric Garcetti said that small businesses “reflect the best traits of Angelenos, courage, hard work and a commitment to serving our neighbors.” 

When he announced the financial aid program Oct. 26, Garcetti said the checks seek to help businesses impacted by the losses brought about by COVID-19.

“With this investment, the city is doubling down on our work to help small businesses recover and thrive,” Garcetti said. 

Carolyn Delgado, general manager of Los Angeles’ Economic and Workforce Development Department, said the awards will help micro and small business rebuild from economic doldrums.  

“The Comeback Checks grant program provides a much needed boost for the city’s mom-and-pop shops, local restaurants, and small businesses to rebound,” Delgado said. “Angelenos are resilient and these grants offer our small businesses financial support to fortify and propel their journey toward economic recovery.” 

The city ruled that qualifying businesses are micro enterprises with five employees or less and with up to $100,000 in annual gross revenue, small businesses with less than $1 million in yearly gross income, and small to medium businesses with documented income between $1 and 5 million in their most recent tax filings. 

Any retail, service or manufacturing business that receives an award can use the money to make rent, pay employee salaries including that of the owner if it is a micro business, cover purchases of goods and supplies, and for utilities, accounting, marketing campaigns and sanitary equipment for periods after March 3, 2021.

Awardees can use the grant to pay insurance policies and expenses to improve production, services and sales and to phase in measures to protect customers and staff from catching COVID-19. 

The city also has issued a list of exceptions that disqualify certain businesses from obtaining grants. 

The first is that money from the comeback checks program cannot be disbursed to cover similar salary periods with funds obtained through the paycheck protection program sponsored by the Small Business Administration.

If the paycheck protection loans covered wages after March 3, 2021, the municipal grant can only be used to pay for unpaid salaries or expenses, if they are documented.

The award cannot cover expenses of legal settlements, property taxes, severance pay, damage covered by insurances and payments funded by any other loan or grand issued by a local, state or federal agency. 

Second, the city assembled a list of ineligible businesses that include: cannabis stores, hotels and motels that permit prostitution, organizations that engage in illegal acts, nightclubs, liquor stores, astrology, tarot and palm reading businesses, adult bookstores, massage parlors, strip clubs, gambling businesses and outlets that present shows or get revenue through the sale of prurient sexual nature. 

Publicly traded companies, corporate-owned franchises, payday loan stores, pawn shops, banks, finance companies and firms trading money also are barred. 

Applicants must provide 2019 or 2020 tax filings to verify gross incomes. Businesses with multiple locations should only submit one application, and in case they do not qualify in the current round, they will be considered for following selections and do not need to reapply. 

If picked, businesses will be asked to provide valid tax ID numbers and W-9 forms with legitimate Social Security numbers and a void check to generate a deposit in the proper account.

Lupita’s 98 Party Store managed to stay afloat due to a cushion of savings and the family working in unison in the darkest times, when monthly expenses piled up and uncertainty reigned on the store’s future.

Pineda said she initially applied for a forgivable paycheck protection program loan, but did not get it. She became discouraged and failed to reapply as large corporations and publicly held entities grabbed the first round of money authorized by the federal government back in May 2020. 

Pineda would not disclose how much she spends for rent each month, but said that a renegotiated lease with her landlord has helped as new and previous customers reach out to hire her services for parties in backyards and outdoor areas.

However, with current inflation at a 6.5% annual rate, and seasonal cold weather that could contribute reignite a spike on infections, Pineda fears that total economic recovery could take awhile.

“Starting April, we have vastly recovered our lost business,” she said Nov. 12. “We have not rested. Yesterday, I was so busy arranging a party site in Alhambra that I could not pick up the phone. Thankfully, my husband and children have always backed this endeavor.”  

Applications for round two of the city’s comeback checks program may be submitted at www.comebackchecksla.com.

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