Governor Newsom’s Budget Includes Critical Investment in Small Businesses

“We commend Governor Gavin Newsom for signing a budget package on Monday that includes several critical provisions to help small businesses in California stay afloat. We support the Governor’s efforts to prioritize a budget that includes access to capital, access to affordable healthcare, and other essential resources to create equity and help entrepreneurs thrive. 

California small businesses are the backbone of the economy, employing more than seven million people. Despite their importance to the state’s economy, our polling has shown that small businesses, especially those owned by people of color, women and immigrants, have struggled to access the financing and tools they need to succeed on their road to recovery. At the beginning of 2021, our research found that 60% of small business owners in California who laid off employees could not restore their headcounts to pre-pandemic levels, and nearly 1 in 5 entrepreneurs of color (17%) said they are likely to close their businesses permanently. 

We are glad the Governor has worked with the legislature to promote policy solutions and deliver critical resources that will help these businesses on their road to recovery, including the following: 

• $1.5 billion to renew the state’s small business grant relief program and provide three additional rounds of grants to small businesses 
• $50 million for I-Bank lending  programs that will leverage federal dollars to help small businesses to expand their enterprises, including the California Rebuilding Fund, which will help business owners access capital for long-term recovery
• $50 million one-time for grants to local governments and nonprofits to provide direct relief to eligible microbusinesses
• $35 million for one-time microgrants of up to $10,000 to seed small business creation, particularly for underserved entrepreneurs facing opportunity gaps

Additionally, we are happy to see that the budget package includes support for the Office of Healthcare Affordability to help establish accountability to lower costs for healthcare for small business owners and their employees. We know that many self-employed individuals and small business owners access their health coverage through the state’s marketplace. What’s more, California business owners have identified healthcare costs and coverage as one of the biggest barriers to their success. 

We also support the Governor’s moratorium on commercial evictions and for providing rent relief to tenants and landlords. Many small business owners are still struggling to pay the rent they owe. A moratorium on evictions ensures small business owners aren’t forced to make the difficult decision between paying rent or reducing employee wages. 

Small Business Majority encourages the administration to continue investing in small business owners and to set a comprehensive state policy agenda that recognizes entrepreneurship is central to California’s economy.” 

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