San Jose has extended the deadline for a small business grant program through this month, but confusion lingers about who is eligible.
Small businesses now have until 5 p.m. on June 30 to apply. The program aims to provide up to $15,000 in funding to 300 small businesses, targeting back rent and utility debts incurred during the COVID-19 pandemic. As of June 13, 125 applications have been completed, Vic Farlie, senior executive analyst for the Office of Economic Development, told San José Spotlight.
To qualify, San Jose business owners must fall into specific income brackets. A single-family household must make under $78,550 per year. A family of four must make under $112,125. The business must have less than 10 employees, have gross receipts under $3 million and have been in business before March 24, 2020. Most importantly, the grant money must be used to pay for back rent and utility costs from March 24, 2020 through Aug. 19, 2021.
Deborah Lopez, owner of Litzy’s Salon on Story Road in San Jose, said the pandemic plunged her into significant debt, from which she has yet to emerge. She said the requirements made the application process more cumbersome, but praised the rent relief program as a whole.
“Without the grants, it might be very difficult—and maybe impossible—to move forward and continue my business,” Lopez told San José Spotlight. “This type of assistance program is a great relief, financially and mentally.”
This program is the second iteration of a back rent grant by the city. In 2020, the city gave $3.8 million to more than 300 small business owners. The first time around there were barriers for those who where digitally illiterate, lacked broadband access or English wasn’t their first language. Small business owners can now apply in person.
Dennis King, executive director of Access Small Business Development Center (SBDC), a small business network administering the grant program, said the lack of applications is not a failure of outreach. Rather, this initiative is designed to cover back rent from nearly a year ago, versus the prior program in 2020 that covered rent due that same year.
This difference in time frame may explain why more than 400 applications are stalled in the pre-screening stage. As business owners go through the application process, King said many realize how narrow the requirements for this latest iteration of the program are and learn they don’t qualify.
“It’s much more of an urgent safety net, for those who have tapped whatever else they could tap,” he told San José Spotlight.
Farlie said no significant changes have been made to the grant formula. The grants will be awarded through a lottery to ensure impartiality, instead of a “first come, first served” approach, which was how the 2020 round of grants were administered. The current grants will only be awarded after the application deadline, and undocumented individuals are eligible to apply for assistance.
Jesus Flores, president and CEO of the Latino Business Foundation Silicon Valley, said the inclusion of undocumented people was important because they were ineligible for other programs. During the pandemic, his organization conducted a survey and discovered almost 30% of small business owners in East San Jose are undocumented.
The grant program may leave out some businesses whose back rent is more recent, Flores said, but it targets the owners who are most urgently in need of help.
“I think it was a very well-designed grant to support those businesses,” he told San José Spotlight.
The main challenge facing the grant program is generating more applications.
With the time afforded by the extension, Access SBDC and the city are contacting businesses who did not previously receive rent relief. During the program’s first iteration in 2020, 997 applications were submitted. Of these, 360 received a grant.
“We emailed out to those approximately 600 (applicants) from the past,” King said, “but now we’re trying to systematically call them to press a little further and find out what their current status is.”
The city is also doing outreach to raise awareness about the initiative, with an emphasis on the Vietnamese, Chinese and Hispanic communities.
San Jose business leaders emphasize the need to sustain small businesses.
“Retail establishments, local bookstores, restaurants, the bars where they watch Warriors games—those are what makes a community vibrant,” said Derrick Seaver, CEO of the San Jose Chamber of Commerce. “The long-term health and vitality of those industries really impact everybody.”
Nate LeBlanc, business development manager at the San Jose Downtown Association, echoed Seaver’s sentiments.
“Small businesses have been through extremely trying times in the past two years,” LeBlanc said. “Perhaps the program could have been enacted sooner, but we’ll take what we can get.”
Contact Jack Delaney at [email protected]