Struggling small-business owners throughout Southern California are applauding Gov. Newsom’s plan to expand a grant program aimed at keeping them afloat amid the COVID-19 pandemic.
Many mom-and-pop businesses have been hammered by costs associated with on-again/off-again closures and constantly shifting safety guidelines aimed at protecting employees and customers.
On Thursday, Newsom said he will ask state lawmakers to add $1.5 billion to a program that gives free grants of up to $25,000 to small businesses. It would supplement the program’s $2.5 billion in existing funding, boosting the total to $4 billion.
Jeanie Viveros, who co-owns Tiddlywinks Toys & Games in Orange along with her husband Gilbert, called Newsom’s plan “great news.”
“We’re still not operating up to where we were in 2019, so we could use whatever money is available to help us with marketing and promotions,” she said.
A fixture in Old Towne for eight years, Tiddlywinks sells classic-style toys, games and puzzles. The 2,300-square-foot shop was in the process of boosting its online presence when COVID-19 hit.
“We started that literally weeks before, and when the pandemic hit that pushed us to go full-blown,” she said. “We’re still building our business back up.”
To be eligible for the grants, businesses must have between $1,000 and $2.5 million in annual revenue. They must have been operating before June 1, 2019, and have a physical presence in California.
Newsom also announced $147 million to give eligible businesses a tax credit of up to $1,000 tax credit for each employee they hire. Additional funding would include $95 million for Visit California, a nonprofit that promotes tourism; $250 million to help make up for losses in the state’s ports; and increasing the “CalCompetes” tax credit to $360 million, which encourages businesses to relocate to California.
Viveros says she may tap into the tax credit for businesses that hire. Two college students who had been working there recently left after they graduated to move on to other jobs.
No help from the landlord
Times have also been tough for salon K in Stevenson Ranch. Owner Kim Heinrich said she’s had to repeatedly close her business and furlough workers, only to reopen and rehire them again amid changing COVID-19 mandates.
“We were closed for six months last year,” she said. “When we reopened we were at 20% to 50% capacity, and now we’re at 75%. It’s been horrible because my landlord didn’t work with me at all. There was no reduced rent, and there were threatening emails, even with the rent moratorium in place.”
Heinrich said she’ll likely pursue a grant through the state’s expanded program.
“I’ve already applied for every grant there is,” she said.
Revenue cut in half
Sinfully Sweet Apple Company in downtown Upland didn’t close its doors during the pandemic, but it was hit hard.
The store lost 50% of its revenue in 2020, according to owner Martha Henderson. Contracts for caramel apples used as prizes or gifts in fundraisers ended up not getting filled.
“By the end of March I got email after email — everyone was canceling their fundraisers because schools were closed,” Henderson said Thursday. “Instead of doing 50,000 apples last year, we did 18,000.”
She received a bridge loan for $10,000 that she now has to pay back, so she welcomes Newsom’s idea of a $25,000 grant that doesn’t have to be repaid.
“I think it is absolutely wonderful,” Henderson said. “I do like that idea.”
Learning to pivot
Shelly Holman, owner of the Collar & Leash Pet Shop in Garden Grove, said the new grant would help her greatly.
Holman, whose family has owned the shop since 1972, said sales dropped as well as grooming services. she said. “Customers went online to buy things like dog toys and many avoided bringing their pets in for services, especially at the beginning of the pandemic.”
She said it’s been hard to figure out how to make all of her payments every week.
“We’re not like the big companies that get to put everything on credit or bargain down prices,” she said.
Amid the chaos, she learned to pivot.
After losing a tenant in an adjacent spot – “and with the pandemic, nobody would rent it out” – she expanded a relatively new wellness center for animals next door.
“You have to be flexible,” she said.
Anja Walker, who closed down her Riverside restaurant the Soup Shoppe early in the pandemic, hadn’t yet heard of Newsom’s proposal but said earlier state and local grants helped her business stay in operation after she reopened it.
Business has improved, she said, since Riverside moved into the orange tier which has allowed inside dining at reduced capacity.
“We were doing a lot of takeout, and it’s slowly transitioned to more indoor,” Walker said.
The grant money will likely disappear fast.
Newsom established a grant program for small businesses in December. About 334,000 businesses applied during the first round of funding, requesting $4.4 billion in grants. But the program only had $500 million to spend. In February, Newsom and lawmakers added $2 billion to the program. Now, he wants to include the additional $1.5 billion from federal relief funds.
The Associated Press contributed to this report.
Source: Orange County Register