CC 05-19-2020 Item No. 26 CDBG CARES-CV Funds for Small Business_Staff PresentationAngela Tsui, Economic Development Manager
May 19, 2020
Item 26: Consideration of
Allocating CARES-CV Funds Toward
Creation of Small Business Grant
Program
CC 05-19-2020 Item No. 26
CARES-CV Funding and HUD
Guidelines:
●The City is scheduled to receive $229,017 in CARES
Act supplemental funding from HUD.
●This is a special allocation of CDBG funds to be used
to prevent, prepare for, and respond to COVID-19.
●Funds can be used to provide short-term working
capital assistance to small businesses to enable
retention of jobs held by low-and moderate-income
persons.
CARES-CV Funding and HUD
Guidelines (cont.):
●If using the funds for small business grants, the City is required to
establish a process in which to analyze and document the
business’s need for financial assistance and meet one of the
national objectives of the CDBG program: creating or retaining
the job of low-moderate income employees.
●For microenterprises (businesses with 1-5 EE) HUD requires the
creation or retention of at least one job for a low–moderate
income employee.
●For businesses with six or more employees HUD requires at least
51% of the jobs created or retained will be held by, or made
available to persons whose household income is at 80% of Area
Median Income or less, adjusted for household size.*
Assisting Small Businesses Affected
by COVID-19 Pandemic
●Staff has compiled a comprehensive Federal, State, and
local information and resource list for businesses and their
employees at www.cupertino.org/covid19businessinfo
●Staff also created and maintains a webpage to promote
open businesses at www.cupertino.org/OpenForBusiness
●Staff partners with the Chamber, SBDC, and other
organizations to co-host webinars on a regular basis
(weekly or bi-weekly)
●Currently the City does not have a financial assistance
program for small businesses
Small Business Relief Programs in Neighboring Cities
City Los Altos Palo Alto Santa Clara Mountain View Sunnyvale San Jose
Total $$250K $500K $800K $400K General
Fund; $600K Los
Altos Community
Foundation
$600K City
Funds; $700K
donations
$1.5M SVCF;
$2.5M General
Fund
Funding Source General Fund General Fund General Fund and
Budget
Stabilization
budget
General Fund and
Private Sector
donations
General Fund
and Private
Sector
donations
General Fund
and Private
Sector
donations
Administrator Economic
Development
Office
City Manager's
Office
City Manager's
Office
MainStreetLaunch.
org
The Enterprise
Foundation/Silic
on Valley SBDC
Opportunity
Fund
Loan or Grant $5K and $10K
Grants
$10K Grants for
non-essential
businesses from
original order
$5K Grants for
essential
businesses
$10K Grants for
non-essential
businesses from
original order
$5K Grants for
nonprofits and
businesses (1-25
EE)
Loans up to $10K
with 0% interest, no
fees, no collateral,
and a term of up
to three years
$5K, $10K, and
$15K Grants
Grants up to
$10K (1-5 EE)
First-come or
Lottery
Lottery Lottery First-come First-come Lottery First-come
Launch Date Late May End of May 4/17/20 4/29/20 End of May 5/11/20
Proposed Small Business Relief Grant
Program
●Staff recommends an allocation of $229,017 of Cupertino’s
future CDBG funds made available through the Federal
stimulus CARES Act be put toward the creation of a small
business relief/assistance program to provide $5,000 grants
to eligible Cupertino businesses.
●Breakdown of the funding allocation:
CARES Act Allocation Budget FY 20-21
Entitlement Amount $229,017.00
Estimated Program
Administration by City staff
for compliance and auditing
(20%)
$45,803.40
Total Available for Programs $183,213.60
Next Steps if Moving Forward
●Staff to return in two weeks with an amendment to the City’s
Annual Action Plan and include a public comment period
●Select the grant dollar amount
●Select the criteria by which businesses are eligible to receive a
grant (e.g., brick-and-mortar located within Cupertino, have a
current business license, 1-5 EE, etc.) and include HUD requirements
●Select the method by which businesses are chosen (e.g., first-come
first-serve vs. lottery)
●Authorize the City Manager to choose a third party to administer
the grants and waive any otherwise applicable competitive
bidding requirements to expedite launching the program