Small Business Grants in California – Overview
California is not just known for sandy beaches and warm sunny climates. It is also one of the most lucrative states for businesses in the United States.
Numerous small-time entrepreneurs from California have succeeded in expanding their start-ups into immensely popular brands worldwide.
The state of California offers numerous types of tax credits. There are several government and private funding opportunities in California, too.
Are you planning to launch a new business in California and unsure where to get the funding? Then you’ve come to the right place. In this article, we will check California’s best small business grants.
How to Get Small Business Grants in California
Government grant and loan programs offer financial support for individuals and organizations looking to start or expand their businesses. These small business grants are incredibly useful for those who face difficulties securing bank loans.
US Department of Agriculture Business and Industry Loan Guarantees
This is one of the top choices for small businesses operating in rural areas of California. The USDA Business and Industry Loan Guarantee program provides loan guarantees to lenders for their loans to rural businesses.
Eligibility criteria to qualify for this loan guarantee include:
- Start-ups and existing businesses
- Public bodies
- Cooperatives
- Federally-recognized Tribes
- Non-profit and for-profit organizations
Besides these, the applicant should be a US citizen or reside in the US with legal admittance as a permanent resident.
In addition, private businesses should ensure that loan funds remain in the US. The business being financed should actively create new jobs or save existing jobs in rural parts of the country.
The USDA Business and Industry Loan Guarantee program specifies that the guaranteed loan funds can be used for business purposes such as modernization, development, or debt refinancing in rural areas.
The USDA Business and Industry Loan Guarantee program specifies that guaranteed loan funds cannot be used for certain purposes, including but not limited to agricultural production (with certain exceptions), gambling facilities, and golf courses.
For additional details, you can visit the official website of the US Department of Agriculture.
US Department of Agriculture Rural Business Development Grants in California
The US Department of Agriculture also offers a special Rural Business Development Grant. This is part of its small business grants program in California.
The USDA Rural Business Development Grant program offers financial assistance for technical training, land development, equipment acquisition, and other business development activities to small rural businesses. Businesses with less than 50 employees and US$1 million in gross revenue are considered “small businesses” by the department.
The eligibility criteria for applicants include:
- Rural cooperatives (if operating as a private non-profit corporation)
- Federally-recognized Tribes
- Higher education institutes
- Not-for-profit corporations
- Authorities
- State agencies
- Communities
- Towns
The USDA Rural Business Development Grant program aims to support business development projects in rural areas, specifically targeting communities with populations of 50,000 or less.
The total grant amount is not fixed and has no limit for the maximum grant amount. However, the department gives priority to smaller grant requests.
There are no cost-sharing requirements of any kind. Usually, around 10% of the total Rural Business Development Grant funding is allotted for small business grants.
The funds allotted for this grant can be used for the following purposes:
- Technical training and assistance for business owners and employees
- Acquiring and developing land, construction, renovation or conversion of buildings
- Buying and installing equipment, machinery and utilities
- Abatement and pollution control
- Capitalizing revolving funds for working capital and business start-ups
- Distance learning for job training
- Improving the rural transportation system
- Developing community economy
- Developing business plans and feasibility studies
- Entrepreneur and leadership training
- Rural business incubators
- Long-term business planning
Applicants should check the USDA or relevant program’s website for the most current Rural Business Development Grant program application deadlines. You can submit applications by email to [email protected], or you can submit a hard copy directly at the California Rural Development office. For additional information, you can also visit the official website.
Small Business Administration’s Small Business Loans – 7(a) loans
The Small Business Administration (SBA) offers the Small Business Loan, also known as 7(a) loan. This is the most basic and popular loan program from the SBA.
The SBA 7(a) loan program provides financial assistance through participating lenders to eligible small businesses across the United States. The SBA 7(a) loan program assists for-profit businesses in obtaining financing for various business purposes.
The eligibility criteria clearly state that this small business loan is meant only for businesses, not individuals. Hence, the eligibility criteria are more focused on the business rather than the owner.
Applicants should ensure that they meet the agency’s eligibility criteria in terms of:
- Size of the business
- For-profit status
- Lack of internal business or personal resources for financing
- Ability to repay the loan
There are additional eligibility standards for other variants of the 7(a) loan for special-purpose programs.
For a complete list of eligibility criteria for the SBA Small Business Loan, feel free to visit the official website. The maximum loan amount for SBA 7(a) loans can vary; applicants should refer to the SBA’s current guidelines for specific loan limits.
Depending on the loan’s purpose, the maximum repayment term for SBA 7(a) loans is up to 25 years for real estate and 10 years for working capital, equipment, and general business financing.
The interest rate for the loan depends on SBA maximums and the Prime Rate. There are additional fees associated with this loan. However, the payment frequency for this small business loan in California varies.
Conclusion
These are the top sources for seeking small business grants in California. The federal and state governments run several funding programs to boost small and medium-sized businesses in California.
Feel free to do an in-depth internet search to find more relevant business funding opportunities in your area.
Interactive US Map for Small Business Grants
See Also
Small Business Grants in Pennsylvania
Small Business Grants in Texas
Covid 19 Small Business Grants
Small Business Grants in Florida
Small Business Grants for Women
Best Nursing Schools in California
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