By Alfredo Santana
SOUTH GATE — The City Council, in coordination with the South Gate Chamber of Commerce, will award local businesses hit hard by extended COVID-19 pandemic closures grants of $7,500 to overcome holdover expenses like missed rent, to meet payrolls and buy protective equipment.
On April 26, the council authorized $200,000 obtained from the federal America Rescue Plan, to revamp the finances of barbershops, beauty salons, mom-and-pop restaurants and other storefront businesses that did not receive forgivable loans or other type of economic support when health authorities forced shutdowns as in 2020 and 2021.
As many as 26 business owners could benefit through a vetting and selection process handled by the chamber.
The program, christened the Small Business Assistant Grant, originally called for up to $10,000 awards to eligible businesses.
However, reducing the grants to $7,500 would allow more recipients, some of who are in dire need to stay afloat, said South Gate Chamber of Commerce Executive Director Ana Elizarraras.
She said that the chamber would tailor the program to help brick and mortar barbershops and other retailers that carried the brunt of economic losses due to their inability to operate outdoors, on the curb and in parking lots.
“These funds will allow [these businesses] to pursue improvements like installing plexiglass between work units, and to split service areas for customers,” Elizarraras said. “The funds can be used to purchase new equipment as well.”
For example, the proceeds may cover the cost of restocking supplies, pay due utility bills and rent, and to increase business capacity in the same location.
The grants also can be used to pay for goods to disinfect working areas from germs, to purchase personal protective equipment for employees, to improve sanitary measures in poor ventilated shops and to buy and replace air filters.
To qualify for grants, businesses must meet specific criteria, including providing proof of being impacted by COVID-19, being in operation for at least six months, being located within an eligible census tract, documenting gross income losses of 25% or more compared to the similar pre-pandemic period, being registered with a city business license, employing less than 75 workers, and operating a business that is free of municipal code violations.
Although many small business owners do not sign lease contracts, Elizarraras said the program only requires proof of rent payments with two or three monthly receipts issued by the landlord, preferably if they are in a row.
One reason for the lack of long-term lease contracts may be that many South Gate business owners are immigrants who prefer the flexibility to move out in short notice due to the economic uncertainty brought by the pandemic and inflation rates of 8.5%, the highest in 40 years.
“I encourage business owners to execute a written lease agreement,” Elizarraras said. “It brings stability. Without them, many micro business applications fell through and did not qualify for CDBG grants. We need to see this process as an educational tool.”
The funds are streamlined for businesses with storefronts. Independent contractors and operators who work out of their homes or their vehicles will not qualify, Elizarraras said.
According to a document signed by City Manager Chris Jeffers, the chamber will screen and forward each application to the city “for final review and approval,” followed by a check issued by the city directly to the business.
The City Council agreed to pay $50,000 to the chamber to design and administer the program, follow the allocations requirements and comply with provisions set forth by the American Rescue Plan.
In return, the chamber will conduct audits, maintain business and data records, make reports and keep accounting of all the program’s participants and disbursed funds.
The chamber also committed to produce monthly performance reports for the city for as long as the program lasts, with a final one due 30 days after the funds are fully allocated or if the city decides to terminate it before then.
Elizarraras said that unlike other programs in neighboring cities, the small business grants cannot be used to make structural upgrades, beautify facades or purchase vehicles that may be driven for commercial purposes.
For example, one recipient of a CDBG award told Elizarraras that she invested the money on a new refridgerator to upgrade aging equipment at a restaurant, a valid purchase that met one of the program’s objectives.
More than 200 business owners submitted stacks of documents in support of the CDBG applications, and in the end most ended with nothing.
Some complained to Elizarraras that the process was exhaustive, like gathering business bank statements, and said a similar process would discourage them from applying for future grant programs.
Elizarraras insisted that under the new grant program, the process of gathering documents is much easier, and she encouraged business owners to apply.
As opposed to previous programs that asked for six months of business bank statements, the current program only requires three monthly bank statements.
Elizarraras said she expects about 200 applicants and it may take up to a year for all of them to be reviewed before grants are issued.
Currently, the chamber of commerce supports more than 3,500 area businesses with resources and services, but grant applicants do not have to be members of the chamber to apply for funds.
The executive director warned business owners against individuals and scams charging up to $1,000 to assist in filling, due to the operator’s lack of language skills or for fear of any Chamber of Commerce charges.
The chamber of commerce can also assist business owners with information and updates to meet ordinances and state labor, environmental and safety codes and regulations affecting manufacturers, retail sales and services, she said.
“We need to make sure that 100% of this funding goes to the business owners,” Elizarraras said.
The Small Business Assistant Grant program started receiving applications this week. Interested business owners can visit the South Gate Chamber of Commerce at 3350 Tweedy Blvd., or call (323) 567-1203.